McKay has tough road ahead driving Bapcor

Bapcor’s Angus McKay, formerly of 7-Eleven. Picture: Stuart McEvoy

Former 7-Eleven Australia boss Angus McKay comes to the top job at Bapcor well regarded, but at a big cost and he has his work cut out for him at the underperforming automotive aftermarket parts provider.

Bapcor has failed to hit its guidance numbers and impress following the departure of former boss Darryl Abotomey and it has been reflected in the share price performance.

On Tuesday, Bapcor rejected a $5.40 per share – or $1.8bn – offer from Bain Capital made last month, and 6.45 per cent share holder John Wylie has been reported saying he wants a price of $6 all more.

The Boston-based Bain Capital is understood to have had a frustrating time dealing with Bapcor’s board and what it believes is a lack of engagement, but those close to Bapcor argue the opposite – that its experience has been equally as frustrating as Bain dragged its feet returning the documentation that would guarantee it would adhere to certain conditions while in the data room.

Meanwhile, Macquarie Capital, Bapcor’s defence adviser, has likely exhausted options when it comes to finding a strategic bidder in the United States, with interest said to be limited. And its big hope now is that Bain will come back with a higher offer.

Even better for shareholders will be if Mr McKay earns his $1.9m pay packet and $950,000 sign-on bonus, and boosts performance.

Right now, some shareholders are of the view that the company should take what’s on offer or something close at least, as Bapcor’s bargaining power is currently limited.

Not only is its earnings weak, but its balance sheet is stretched and Mr McKay may clear the decks and raise equity to replenish its coffers.

Shares closed on Tuesday down 1c at $5.06, taking Bapcor’s market value to $1.7bn.