Issues Comprehensive Take Down of the Most Blatantly False and Misleading Claims from the Company’s Investor Presentation Regarding the Value Destructive Merger with IAA
Calls on
Urges Shareholders to Preserve RBA’s Long Term Sustainable Value and Vote on the GREEN Proxy Card AGAINST the Value Destructive IAA Merger
https://www.luxorcap.com/LuxorRBAVote.pdf
“Luxor has exposed a systematic pattern of manipulation and misstatements, using management’s own words to demonstrate the Board’s complete failure to protect shareholder interests. Said more plainly, we believe that Ritchie Bros. is seeking to deceive shareholders into supporting management’s value-destructive empire-building ambitions. We believe that either the Board woefully misunderstands Ritchie Bros.’s business or is willfully misrepresenting it.
Ritchie Bros. reacted to the groundswell of shareholder opposition with an entrenching and unnecessary financing. It then directly and through its conflicted mouthpiece Ancora, engaged in what appeared to be coordinated attacks against some of the Company’s largest long-term shareholders. Ritchie Bros.’s and Ancora’s outlandish and demonstrably false statements to smear long term shareholders only serve to underscore how desperate the Board and management team are to push through an irredeemably flawed transaction.
Fellow shareholders, we must do what the Ritchie Bros. Board and management team appear unwilling to do. We must assume the mantle of fiduciaries and protect Ritchie Bros. from this flawed and ill-conceived merger with IAA’s challenged second-tier business. We have just two weeks until the shareholder vote, and we urge you to vote against the merger with IAA,” said
In its presentation, Luxor fully refutes the baseless claims and mischaracterizations made by the Company and
RBA engaged in a last-ditch gambit to condemn its own Original Forecast and Evergreen Commitment to justify a deal whose economics do not work. This was done in direct contradiction of actual results and numerous historical statements. The RBA Board and management are now representing that the Evergreen Commitment they championed for three consecutive years is not trustworthy. They have resorted to insulting their own business yet purport that they can flawlessly execute on
RBA had no response to the analysis in Luxor’s
The IAA Merger inflates RBA management’s compensation, as they are paid more for running a bigger company regardless of the outcome for RBA shareholders. 50% of management’s long term compensation is based on total earnings growth, not earnings per share growth, which incentivizes empire building. A further 50% of management’s long-term compensation is based on FCF per share growth, which incentivizes buying lower multiple, poor-quality businesses. This explains why management would want to do a horribly dilutive deal – they win, even if shareholders lose.
Luxor is not short IAA, nor does it have any agreements, contracts, or other means of expressing that position. Luxor has stated this ‘on the record’ multiple times. Fir Tree has confirmed to Luxor that Fir Tree does not have, and never has had, a short position in IAA. Repeating a lie does not make it true, no matter how many times RBA and its surrogates do so.
Luxor believes RBA is worth far more on a standalone basis than in the proposed IAA Merger. Using RBA’s own DCF assumptions and Original Forecast, the standalone case is clearly superior for RBA shareholders. RBA's standalone business is performing extremely well, in line with the Company's repeatedly reiterated Evergreen Commitment, and is poised to continue outperforming street expectations amidst improving industry conditions.
RBA shareholder reaction to the deal and since the deal announcement, underscores the negative view RBA shareholders continue to hold towards the IAA Merger. RBA stock plummeted -18% on the day the IAA Merger was announced and continues to significantly underperform its peers and broader indices. This significant underperformance has persisted despite Q3 and Q4 earnings substantially exceeding sell-side estimates.
For further information regarding additional key reasons to Vote No on this transaction, please also see our original
- RBA’s fanciful revenue synergies for the IAA Merger are nonsensical.
- IAA is a second tier, fundamentally challenged business.
- Starboard’s sweetheart deal transfers significant wealth away from RBA shareholders.
Luxor invites its fellow RBA shareholders to review its presentations and join Luxor and many other RBA shareholders in voting the GREEN proxy AGAINST the IAA Merger.
If you require assistance in voting your GREEN proxy or would like to receive updates, please call After reading the information provided, if you agree that the IAA Merger is not in the best interest of RBA or its shareholders, we urge you to take the time to vote AGAINST using your GREEN proxy card. If you have already voted using the Company’s white proxy card, you have every right to change your vote by using the GREEN proxy card that is being mailed to shareholders of record. Only the latest-dated validly executed proxy that you submit will be counted. Please follow the instructions on the GREEN proxy card to vote using one of the available methods provided. To ensure your vote is counted, we recommend that you vote on the internet where possible, so your vote is received before YOUR VOTE IS IMPORTANT IN DETERMINING THE FUTURE OF RITCHIE BROS. |
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