Eagers Automotive (APE) +17.85% surged jumped after emerging from a trading halt, having raised $452m to fund its expansion into North America via the acquisition of a 65% stake in CanadaOne Auto for $1bn. CanadaOne operates 43 dealerships across 8 groups, representing around 20 automotive brands, giving Eagers scale in a new growth market.
- Shares are now trading around $31, with the 1:12 retail entitlement offer set at $21, a huge discount for existing shareholders.
Notably, strategic weight comes via Japanese conglomerate Mitsubishi, which has taken a $50mn stake in the new venture. The move into Canada is a transformative step for Eagers – diversifying earnings beyond Australia and New Zealand while tapping into a large, developed market and providing greater leverage on the adoption of EVs which drove their earnings beat in August. That said, integration risk remains given the size of the deal, but the market is clearly giving Eagers the benefit of the doubt for now.
MM is cautiously bullish toward APE
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