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McMillan Shakespeare buys $911m Eclipx

Devika Syamnath

Administrative services provider McMillan Shakespeare Ltd will buy Eclipx Group Ltd for an implied value of $911 million, or $2.85 per share, in cash and stock, the companies have announced

Eclipx board recommended the offer in the absence of a superior proposal, and the deal is expected to be put to vote by shareholders in early 2019, the company said.

Each Eclipx share will fetch 0.1414 McMillan shares as well as 46 Australian cents, McMillan said, valuing the share at $2.85, based on the stocks' last closing price.

This represents a premium of about 24 per cent to Eclipx' closing price on Wednesday.

In August, Eclipx cut its annual profit guidance citing sluggish auction activity at its online brand GraysOnline, making it a takeover target.

The cut in outlook had then sent the stock to a record low.

The chief executive and chief financial officer of McMillan will retain their respective roles in the merged entity, the companies said.

McMillan Shakespeare shares fell 5.0 per cent to $16.06, while Eclipx rose more than 15 per cent to $2.66.

The broader index was up 0.5 per cent.