IAA - Ritchie Bros. IAA get more shareholder opposition to proposed merger

One of IAA Inc.'s ( NYSE: IAA ) shareholders and one of Ritchie Bros. Auctioneers ( NYSE: RBA ) shareholders notified the companies that they intend to vote against their proposed merger, they said Wednesday.

Eminence Capital, which holds more than 900K shares of vehicle and equipment auctioneer Ritchie Bros.' ( RBA ) class A common stock, said the proposed transaction , under "current deal terms, is a flawed transaction that burdens RBA shareholders with unnecessary risk without providing enough credible upside relative to the standalone RBA opportunity.

Discerene Group LP, whose affiliates and investment vehicles hold 3.6% of IAA's ( IAA ) shares, indicated that it will vote against the deal as the revised transaction "remains wholly inadequate" and alleges that IAA conducted a "fundamentally flawed sale process."

In January, Ritchie Brothers ( RBA ) sweetened its offer for auto salvage company IAA ( IAA ) with a larger cash component as Starboard Value LP made a $500M investment in RBA. The amended deal offers $12.80 in cash and 0.5252 RBA share for each IAA share, bringing the cash component to 29% of the consideration from its earlier mix of 22% cash/78% stock.

RBA holders, Janus Henderson and Luxor Capital, both said they're against the deal .

In late Wednesday morning trading, Ritchie Bros. ( RBA ) shares rose 0.8% , and IAA ( IAA ) stock fell 1.0% .

Earlier this month, Ancora Group, which had originally opposed the merger, changed course and supported the revised takeover agreement.

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