By Svea Herbst-Bayliss
NEW YORK (Reuters) – Ancora Group Holdings, a key shareholder in U.S. auto retailer IAA, has accumulated a new 0.5% stake in Canada’s Ritchie Bros Auctioneers and is calling a major opponent of Ritchie’s $6 billion deal to buy IAA “misinformed,” documents seen by Reuters on Wednesday showed.
In a presentation seen by Reuters, activist investor Ancora supported Ritchie chief Ann Fandozzi and took aim at hedge fund Luxor Capital Group, a vocal opponent of the deal.
Luxor has said the acquisition would distract Ritchie, which auctions used heavy equipment and trucks, from its core business and hurt shareholders.
In its presentation, Ancora, which owns almost 4% of IAA as well as the new 0.5% stake in Ritchie, called Luxor’s analysis “misinformed” and said its interests were “seemingly misaligned”. Ancora noted that Luxor’s Ritchie stake doubled over the past three months while “short interest in IAA was increasing in parallel.”
A spokesperson for Luxor said the firm reviewed the “wildly inaccurate and incorrect statements of other shareholders” and added it wants to “focus on what matters here – preserving value for other long-term shareholders of RBA (Ritchie) like ourselves.”
Ancora, which has successfully pushed for change at retailer Kohl’s and toymaker Hasbro, last month threw its weight behind the tie-up after Ritchie amended the terms.
The changes offer IAA shareholders more cash and reduce the dilution for Ritchie shareholders. Shareholders of both companies vote on the deal at special meetings on March 14.
The companies will soon present their case to proxy advisory firms ISS and Glass Lewis, which will make recommendations on how shareholders should vote.
This week, Luxor disclosed in a regulatory filing that hedge fund Fir Tree Capital Management LP, a prominent short seller, agreed to pay Luxor a “trade incentive fee” on investments in the auto companies.
Fir Tree and Luxor could not be immediately reached for comment.
Eagle Asset Management and Independent Franchise Partners have lined up alongside Ancora to support the deal. Boston Partners recently took a 1.5% stake in Ritchie. On the other side, Deep Field Asset Management joined Janus Henderson Investors in coming out against the deal.
Ritchie’s stock price was up 1.16% on Wednesday as the broader market was down.
(This story has corrected Ancora’s stake in IAA to almost 4%, not 1.92%, in paragraph 4)
(Reporting by Svea Herbst-Bayliss; Editing by Jamie Freed and Cynthia Osterman)