Emeco looks to allay Rentco fears
UPDATE 1.40pm: Emeco has broken its silence on shareholder concerns about its proposed $53 million acquisition of truck rental company Rentco.
Earlier this month, two of Emeco's biggest shareholders - First Samuel and Black Crane Capital, which combined control about 22 per cent of the mining equipment supplier - slammed the deal in a letter to Emeco chairman Alec Brennan.
The institutional investors said the acquisition of Kewdale-based Rentco would be poorly timed and overvalued. They called on Emeco to instead buy back its shares and/or bonds.
Emeco announced this morning that it had had delayed settlement of the deal until April 30.
"Deferral of completion has been agreed by the parties to allow for satisfaction of outstanding conditions precedent," Emeco said in a statement.
Emeco said its board was committed to the acquisition of Rentco in line with its strategy to create a more diversified, resilient business.
However it said it was "engaging in discussions with shareholders who have raised issues with a view to addressing their concerns".
The dissident shareholders have threatened to call for a spill of the company's board if the deal is not called off.
Emeco shares, which have been trading near all-time lows in recent months, closed steady at 12 cents.
The company, which supplies heavy equipment to the resources sector, has been severely affected by the mining downturn.
