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Ritchie Bros. Auctioneers (NYSE:RBA) shareholder Janus Henderson wrote a letter to the company stating it is against the company’s proposed acquisition of auto salvage firm IAA, Inc. (NYSE:IAA).
Ritchie Bros. shares are up over 1%, while IAA is trading is down more than 1% so far in today’s session.
Janus Henderson confirmed it plans to vote against the deal, stating in the letter to Ritchie Bros. that “at the core, we believe the merger would introduce a level of unnecessary risk for Ritchie Brothers shareholders.”
“While we see some strategic merits to the merger, specifically synergies with the real estate footprint and some ability to share technology, we do not believe they are sufficient to justify the risk associated with the transaction,” they add.
Janus isn’t the only firm with concerns regarding the deal. Last week, Luxor Capital said it is deeply concerned about the deal after it was amended to incorporate a more significant cash component, and Starboard Value made a $500 million investment in Ritchie Bros. as part of the reworked agreement.
Luxor also filed a preliminary proxy statement to oppose the deal.
Janus added in its letter today that they “believe the deal is a distraction from the core Ritchie Brothers strategy described by management.”
“In summary, we have significant misgivings about the strategic and financial rationale for this deal, and think the structure and timing are concerning,” added Janus. “Based on our current understanding and the current deal terms, it is our intention to vote against the transaction.”
