Luxor Capital plans to solicit proxies against Ritchie Bros. merger with IAA

Luxor Capital Group, as the manager of funds owning 4.2M shares of Ritchie Bros. Auctioneers (RBA), representing approximately 3.6% of the Company’s outstanding shares, announced that it has filed a preliminary proxy statement with the Securities and Exchange Commission in connection with its opposition to proposals to be presented at the upcoming special meeting of RBA shareholders relating to RBA’s proposed merger with IAA, Inc. (IAA). At the Special Meeting, Luxor intends to vote AGAINST the proposal to approve the issuance of RBA common shares to IAA stockholders in connection with the IAA Merger and AGAINST the proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the share issuance proposal. Luxor said, "The preliminary proxy statement details Luxor’s serious concerns with the proposed merger between RBA and IAA, including Luxor’s belief that: Completion of the IAA Merger risks the permanent destruction of over $1.8B of shareholder value. RBA’s shares are dramatically undervalued and should not be used as an acquisition currency at this time. The IAA Merger would severely erode RBA’s business quality and lacks compelling industrial logic. IAA is a highly challenged business that is structurally disadvantaged to its primary competitor and rapidly losing market share. IAA will require a capital intensive, lengthy and highly uncertain turnaround to put a halt to its continuing loss of customers, declining service levels and rapidly deteriorating earnings. RBA’s standalone businesses offer a clear path for the Company to continue compounding its EBITDA by ~20% per year on an organic basis. Given its growth profile and business quality, on a standalone basis, we believe that RBA’s shares are worth over 100% more than current trading levels. The IAA Merger will dilute RBA shareholders with the issuance of ~70% more shares while substantially and permanently lowering the combined Company’s trading multiple and EBITDA growth rate. Post-merger integration and operations will inevitably require RBA to shift management attention and critical resources to IAA’s structurally challenged business. This will take the Company’s focus away from numerous operational initiatives at RBA that are poised to generate additional upside for RBA shareholders without dilution or commensurate risk."