Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

It’s Official – McMillan Shakespeare (MMS) and Eclipx (ECX) Call It Quits

McMillan Shakespeare Ltd (ASX:MMS) and Eclipx Group Ltd (ASX:ECX) have both released statements to the ASX officially calling an end to the proposed merger.

McMillan Shakespeare Ltd (ASX: MMS) and Eclipx Group Ltd (ASX: ECX) have both released statements to the ASX officially calling an end to the proposed merger.

What Was It All About?

The Eclipx-McMillan merger was originally touted as a “compelling combination” of two complementary businesses. The plan was to combine Eclipx’s operating lease business with McMillan’s salary packaging and novated businesses.

The two companies announced this would generate approximately $50 million in EBITDA run-rate synergies per annum to be realised within three years.

They also expected to see future growth potential from an expanded customer base, increased liquidity and access to capital.

Since being announced, the Eclipx share price has been battered, down 70% over the last six months.

Cracks Started To Show

As McMillan looked further into the Eclipx balance sheet, issues started to arise. Late last month, McMillan released a statement saying, “we do not believe it will be possible to complete the proposed scheme.”

The issues highlighted by McMillan were:

  • A decline in Eclipx NPATA of 42.4% compared to the first five months of FY18
  • “Significant” issues with the Right2Drive and Grays divisions
  • Impact of process errors which Eclipx has identified on past financial years
  • Eclipx no longer expects to meet FY19 earnings guidance provided on 29th January 2019
  • Eclipx was unable to provide revised FY19 earnings guidance

McMillan shares rose on this announcement while Eclipx tanked.

It’s Official — They’ve Broken It Off

Both companies have confirmed today that the merger will not be going ahead.

McMillan’s Chief Financial Officer Mark Blackburn said that McMillan and Eclipx, “have today agreed to terminate the Scheme Implementation Agreement dated 8 November 2018 (SIA) with immediate effect and to release one another from any claims relating to the SIA and the proposed scheme.”

Blackburn also announced that Eclipx has agreed to reimburse McMillan for costs incurred in relation to the SIA, amounting to $8 million. Eclipx stated that this will be funded from operating cash flow.

McMillan shares traded 1.3% lower following the announcement, while Eclipx shares end down 2.5%.

Forget McMillan and Eclipx, if you’re looking for ASX shares that are far more reliable and growing quickly, consider getting a copy of our free investing report below…

[ls_content_block id=”14947″ para=”paragraphs”]

Disclaimer: At the time of writing, Max does not own shares in any of the companies mentioned.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content