ATO ruling halts $508m auto deal

22/06/2018 - 13:42

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Perth investor Andrew Hopkins’ planned $508 million buyout of national panel beating business AMA Group has been cancelled after the group failed to get an expected ruling from the Australian Taxation Office.

ATO ruling halts $508m auto deal
Andrew Hopkins (right) with AMA Group executive chairman Ray Malone.

Perth investor Andrew Hopkins’ planned $508 million buyout of national panel beating business AMA Group has been cancelled after the group failed to get an expected ruling from the Australian Taxation Office.

Under the proposal, Melbourne-based AMA was set to demerge its automotive components, accessories and procurement business into a new company that would have listed on the ASX, with the remaining panel repair business to be purchased at a price of 86 cents per share.

However, AMA said today it had received a formal response from the ATO refusing its request for a ruling on capital gains tax relief from the demerger.

“The AMA board is disappointed that the Deputy Commissioner of Taxation has taken a different view as to the requirements for demerger relief as compared with previous transactions, particularly given the advice the board received from its advisors that demerger relief would be granted,” the company said in a statement to the ASX.

Mr Hopkins and private equity group Blackstone were to become the major shareholders in the panel beating business, with Mr Hopkins set to own 49 per cent, while Blackstone would have taken a 51 per cent share.

Mr Hopkins told Business News today he was unlikely to pursue another deal. 

Two years ago, Mr Hopkins struck a deal with AMA to sell his Gemini panel beating business for $100 million.

Gemini Accident Repair Centres had 41 panel repair centres in 2015, with AMA believed to have about 120 across Australia and New Zealand now.

Following that acquisition, Mr Hopkins became a major shareholder and director in the company.

AMA was advised by Gilbert + Tobin, PwC, Colinton Capital Partners and Nicholson Ryan Lawyers.

Blackstone is being advised by Ashurst, Deloitte and UBS.

AMA said despite the distraction of the proposed transaction, the business haD continued to perform strongly and is on target with market guidance.

Shares in AMA were off 4.08 per cent at 94 cents each at 330pm AEDT.

 

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