Reasons behind 2CC takeover bid
The majority shareholder in 2 Cheap Cars (2CC) has made a takeover bid for the company’s remaining shares to “consolidate ownership and streamline” its structure.
An offer document was lodged on July 27 under the Takeovers Code and takes the form of a letter to 2CC’s other shareholders from Sena & Co, which is owned by 2CC’s co-founder and chief executive Yusuke (David) Sena.
It states: “Having steered 2CC through its years as a listed company, David is now of the view the business is best positioned to realise its full potential as a private entity.
“David’s commitment to 2CC is long-term and unconditional. As the company’s founder, largest shareholder through Sena & Co and chief executive, he is uniquely positioned to lead 2CC into its next phase – one characterised by focused, founder-led decision-making.
“Sena & Co currently holds or controls 75.924 per cent of the ordinary shares in 2CC. That controlling position was established in 2023, when the Sena Family Trust acquired the shareholding of Eugene Williams, David
Sena’s co-founder of 2CC, consolidating majority ownership under David’s associated interests.
“The Sena Family Trust subsequently transferred those shares to Sena & Co, the vehicle through which David holds his investment in 2CC.”
As for how 2 Cheap Cars got to where it is today, the offer document states: “Sena co-founded 2CC with a straightforward conviction that New Zealanders deserve access to quality used vehicles at genuinely affordable prices, without compromise on reliability or service.
“From a single yard, 2CC grew into one of New Zealand’s most recognised used-vehicle retailers, building a loyal customer base and a reputation for value that larger, more expensive competitors struggled to replicate.
“The decision to list 2CC on the NZX was made at a particular moment in the company’s development to access capital markets, broaden the shareholder base and fund the expansion that transformed 2CC into the national business it is today.
“That chapter of 2CC’s story has been a success and David is proud of what the company has achieved as a listed entity.”
‘Highly attractive premium’
The offer provides shareholders with a “highly attractive premium” and certainty of value in a single transaction. The offer document describes Sena & Co’s offer as “compelling”.
It states the offer price of $0.80 in cash per share exceeds 2CC’s recent share-price trading, including a premium of:
• 21 per cent to the last closing price on the NZX of $0.66 on July 9, the final trading day before the date on which the takeover notice was lodged.
• 20 per cent to the one-month volume-weighted average price (VWAP) of $0.66 per share, 24 per cent to the six-month VWAP of $0.64 per share, and 39 per cent to the 12-month VWAP of $0.58 per share.
The offer represents a multiple of earnings before interest, taxes, depreciation and amortisation (EBITDA) of 5.2 times 2CC’s EBITDA for the year ending March 31, 2026, of $8.1 million.
Sena & Co’s offer is subject to no regulatory conditions and offers all-cash consideration of $0.80 per share. It follows payment of the recent $0.04 per share dividend declared by 2CC in June.
As Sena & Co currently holds 75.924 per cent of ordinary shares in 2CC, it is and will remain the controlling shareholder regardless of the offer’s outcome
If the offer succeeds at or above the 90 per cent acceptance threshold, Sena & Co intends to compulsorily acquire all remaining equity securities in 2CC and apply for 2CC to be delisted from the NZX’s main board at which point any remaining shareholders will be acquired out at the offer price.
If the 90 per cent threshold isn’t met but the minimum acceptance condition is waived, 2CC would be expected to remain listed on the NZX, with Sena & Co continuing to hold its controlling majority position and maintaining its board representation.
The statement adds: “In that scenario, minority shareholders would remain in a majority-controlled company with reduced trading liquidity and no near-term prospect of a liquidity event.
“The offer is subject to usual conditions and a condition that ANZ does not terminate or withdraw Sena & Co’s senior debt facilities entered into to fund the offer, but not any due diligence or regulatory conditions.
“We believe the offer represents a compelling opportunity to unlock significant value and deliver a positive outcome for all 2CC minority shareholders. It enables you to sell your shares at a significant premium to recent share prices and we encourage you to accept the offer.”
Target company statement
2 Cheap Cars’ independent directors have recommended the takeover offer be accepted.
Michael Stiassny, chairman, explains Sena & Co’s offer has come after engagement with the company’s independent directors following receipt of a confidential non-binding indicative offer (NBIO).
He explains: “The price per share in the NBIO was initially $0.75. After negotiations, Sena & Co submitted an amended NBIO, offering $0.75 per share if the 90 per cent minimum acceptance condition was waived and $0.80 per share if the 90 per cent minimum acceptance condition was satisfied.
“Following further negotiations, Sena & Co increased the offer price to $0.80 per share in all cases. Despite numerous discussions, the independent directors were unable to get Sena & Co to increase the offer price beyond $0.80. However, the independent directors are not confirming either that Sena & Co will not increase the offer price.”
The board’s consideration of the offer has been delegated to and managed by its takeover committee, which comprises the independent directors of 2CC – Stiassny and Gordon Shaw.
The key reasons why the independent directors have recommended accepting the offer include the offer price of $0.80 per share being within the independent adviser’s valuation range of $0.71 to $0.90.
The offer price represents a 21 per cent premium to the pre-announcement trading price of 2CC’s shares – $0.66 per share – and a 39 per cent premium to the VWAP on the NZX’s main board of $0.577 per share for the 12 months ended July 9, 2026.
Other reasons given by the takeover committee to accept the offer are 2CC is substantively under the control of Sena & Co, trading in 2CC’s shares is illiquid and the offer presents a certain opportunity to sell, and no competing proposal has emerged.
Stiassny, who has an interest in 102,139 shares, and Shaw, who has an interest in 10,181 shares, intend to accept the offer.
The takeover offer will remain open for acceptances until 11.59pm on August 24, 2026. If Sena & Co wishes to do so, it may extend the offer – in one or more extensions – beyond this date to as late as the same time on October 19.
If Sena & Co extends the offer, the new closing date will be announced through the NZX. Sena & Co must give at least 10 working days’ notice of an extension of the offer period.
Shareholders have been advised: “If you validly accept the offer, you will be paid the offer price for your shares by Sena & Co within five working days after the latest of the date on which the offer becomes unconditional, the date on which your acceptance is received, and August 24.”
Rationale for offer ‘sound’
An independent adviser’s report into the takeover bid was published by Simmons Corporate Finance on July 23.
It provides an analysis of the rationale Sena & Co has provided in its offer documents, which says having steered 2CC through its years as a listed company, David Sena is now of the view the business is best positioned to realise its full potential as a private entity.
It adds: “The objective of the Sena offer is to acquire all remaining ordinary shares in 2CC to consolidate ownership and streamline the company’s structure.
“The offer provides minority shareholders with an opportunity to realise their investment at a premium to 2CC’s current trading prices, in circumstances where the shares have been thinly traded and secondary market liquidity has been limited.
“We consider the rationale for the Sena offer to be sound. Other than enhanced visibility and profile, there appears to be little benefit to 2CC being a listed company. It is relatively small in size and trading of its shares on the NZX’s main board is extremely thin.
“The costs the company incurs associated with being listed most likely outweigh the benefits derived from 2CC’s profile as a listed company.
“We assess the fair market value of 100 per cent of the ordinary shares in 2CC to be in the range of $32.3m to $41m as at the present date. This equates to a value of $0.71 to $0.90 per share, with a midpoint of $0.81.
“The valuation represents the full underlying standalone value of 2CC based on its current strategic and operational initiatives. The value range exceeds the prices at which we would expect minority interests in 2CC to trade at the present time in the absence of a takeover offer.”
