Ugly Duckling Corporation has confirmed that its chairman and largest shareholder, Ernest C. Garcia II, has made an offer to the board of directors to purchase all of the outstanding shares of common stock of the company not already owned by Garcia, who currently owns about 36.5 percent.
Under the terms of the offer, the holders of the outstanding shares of commnon stock would receive $8.50 per share, $2.50 in cash and $6 in subordinated indebtedness of the acquiring company.
Greg Sullivan, CEO and president of the company, has an arrangement with Garcia under which he would purchase or receive an option to purchase a 20 percent interest in the acquiring company.
The board of directors has established a special transaction committee of the board, composed of disinterested directors, to evaluate and make a recommendation to the full board on the proposal, according to a company press release.
Ugly Duckling Corporation, headquartered in Phoenix, Ariz., bills itself as the largest operator of used car dealerships focused exclusively on the non-prime market. It underwrites, finances and services non-prime conracts generated at its 77 dealerships, located in 11 metropolitan areas in eight states.