(Reuters) - Australian car dealer Automotive Holdings Ltd AHG.AX on Friday said it had decided to sell its refrigerated logistics business following a strategic review and had informed its suitor AP Eagers (APE.AX).
AP Eagers, Automotive’s biggest shareholder, has received conditional approval from Australia’s competition regulator to take over its smaller rival in a deal valued at A$836 million ($566.6 million).
“AHG’s intention to pursue a sale of the Refrigerated Logistics division is also consistent with AP Eagers’ intent as contained in its Bidder’s Statement,” the company said in a statement.
Automotive began a strategic review of its refrigerated logistics unit in February this year, months after a unit of China’s HNA Group terminated a deal to buy the unit.
Shares of Automotive Holdings fell as much as 11% on Friday morning to their lowest level in over a week, while AP Eagers requested a trading halt until it could respond to Automotive’s announcement.
The takeover deal is conditional on AP Eagers selling its car dealerships in certain regions.
The company reaffirmed its operating net profit after tax guidance for fiscal 2019 of A$50 million, adding that it would write-down the carrying value of its refrigerated logistics unit by A$24 million due to an overstatement of its revenue last year.
Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Stephen Coates