Fleet News

ICA/CMA merger ahead as buyout scheme fails

INDEPENDENT Car Auctions will merge with Central Motor Auctions following an extraordinary general meeting of CMA shareholders on Monday (June10). However, auction giant ADT blocked ICA's preferred scheme to take complete control of CMA, and ADT will remain a major shareholder of the new merged group. Of the shareholders who attended the EGM, 64.66% backed the scheme, while 35.34% voted against it.

But in a further twist, the London Stock Exchange may cancel the listing of CMA because fewer than 25% of its shares remain in public hands - public being defined as a shareholding of less than 5% - for CMA and ADT now own over 85% of the shares between them. If this happens, ADT may find itself with an expensive stake, believed to be worth £3 million, in a company over which it has no day-to-day control, and from which it can only receive share dividends at the discretion of the board of directors, where it will not be represented.

In addition, it will have no rights in ICA but as a minority shareholder ADT will be entitled to a proportionate share of CMA profits. Its stake of over 25% also gives it a large enough share to be a thorn in the side of CMA for certain issues which require a special resolution, such as a change to the company's articles, although ADT has not made any suggestion this is its intention.

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