Acquisition of Asset Acceptance Capital Corp. by Encore Capital Group, Inc. May Not Be in the Best Interests of Asset Acceptance Shareholders
Robbins Arroyo LLP is investigating the acquisition of Asset Acceptance Capital Corp. (NASDAQ: AACC) by Encore Capital Group, Inc. (NASDAQ: ECPG). On March 6, 2013, the two companies jointly announced the signing of a merger agreement whereby Encore Capital will acquire Asset Acceptance for $6.50 per share. Asset Acceptance shareholders can elect to receive their consideration in cash or in Encore stock or a combination of cash and Encore stock.
Asset Acceptance Shareholders Might Not Receive Maximum Value for Their Stock
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Asset Acceptance is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger or whether they are seeking to benefit themselves.
The $6.50 merger consideration represents a premium of only 12.85% based on Asset Acceptance’s closing price on March 5, 2013. Moreover, the offer price is substantially below the $8.00 target price set by First Analysis and the $7.00 target price maintained by Sidoti and Co. since September 11, 2012. Further, the company’s stock has traded above the offer price on numerous occasions during the past year, trading as high as $6.70 as recently as November 6, 2012.
Is the Acquisition Best for Asset Acceptance and Its Shareholders?
Asset Acceptance also released its fourth quarter and full year 2012 earnings on March 6, 2013, reflecting increases in cash collections and adjusted EBITDA over the same periods in 2011. Specifically, Asset Acceptance reported increased cash collections to $85.7 million and $367.8 million for the fourth quarter and full year respectively. Further, adjusted EBITDA increased to $40.7 million for the quarter and $183.2 million for the year. In announcing these results, Rion Needs, President and CEO of Asset Acceptance commented, “We continue to show progress in key performance metrics and have ambitious goals to further improve efficiency … we believe we remain well positioned to reach our operational and profitability goals on 2013 and beyond.”
Given these facts, the firm is examining the board of directors’ decision to sell Asset Acceptance now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Asset Acceptance shareholders have the option to file a class action lawsuit against the company to secure the best possible price for shareholders and the disclosure of material information so shareholders can vote on the transaction in an informed manner.
Asset Acceptance shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly. You can also contact attorney Darnell R. Donahue at (800) 350-6003.
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