FILE PHOTO: The sign outside Richie Bros. Auctioneers is seen in Longmont, Colorado, U.S., February 21, 2017. REUTERS/Rick Wilking/File Photo
By Svea Herbst-Bayliss
NEW YORK (Reuters) -A majority of Canada’s Ritchie Bros (NYSE:RBA) shareholders have voted in favor of the company buying U.S. auto retailer IAA (NYSE:IAA) in a deal valued at roughly $7 billion, people familiar with the preliminary tally said.
The cash and stock deal, first announced in November, has become one of the year’s most contested.
Hedge fund Luxor Capital, which owns roughly 4.2% of Ritchie Bros, had been urging shareholders to vote against the deal. The fund argued that the deal was risky and would distract Ritchie Bros, which auctions used heavy equipment and trucks, from its core business and hurt shareholders.
IAA’s stock price jumped 10% on the news of a majority of Ritchie Bros investors voting for the deal.
Spokespeople for Ritchie Bros and IAA did not immediately respond to requests for comment.
Proxy advisory firms Institutional Shareholder Services and Glass Lewis earlier this week recommended that Ritchie Bros shareholders vote against the takeover. Smaller proxy adviser Egan-Jones recommended that shareholders vote for it.
Ritchie Bros has argued that the acquisition would unlock substantial value that neither Ritchie Bros nor IAA could achieve alone.
Luxor in a statement said it was disappointed by the outcome after its solicitor tabulated that 46% of the votes cast voted against the deal, not enough to scuttle it.
“We wish the Company well with its integration of IAA,” Luxor President Doug Snyder said, also thanking shareholders for supporting its “fact-based campaign.”