IAA soars as majority of Ritchie Bros. holders vote to approve deal (update)

Update 12:58pm: Updates to show Luxor Capital confirming that Ritchie Bros. won holder vote to go ahead with IAA deal.

IAA Inc. (NYSE:IAA) jumped 10% after a majority of Ritchie Bros (NYSE:RBA) holders voted to approve the acquisition, according to preliminary results of vote scheduled for Tuesday. Ritchie Bros. (RBA) fell 3.8%.

Luxor Capital, who had been publicly opposed to Ritchie's acquisition of IAA, said that 46% of votes cast, were voted against the deal, indicating it had lost its battle, according to a statement.

"Despite our best efforts on behalf of all shareholders, and our disappointment in the outcome, we wish the company well with its integration of IAA," Doug Snyder, preside of Luxor, said in a statement. "Luxor would like to thank Ritchie Bros. shareholders for supporting our fact-based campaign, and exercising their responsibilities as engaged fellow owners."

The news come after influential proxy adviser ISS and Glass Lewis on Monday recommended that Ritchie Bros. (RBA) shareholders vote against the company's planned more than $7 billion purchase of IAA. Proxy adviser Egan-Jones recommended that RBA holders vote in favor of the deal.

Ritchie Bros. (RBA) shares initially plunged 18% on the day the original $7.3 billion IAA deal was announced in November with some analysts questioning the transaction. In January, Ritchie Brothers (RBA) amended its offer for auto salvage company IAA (IAA) with a larger cash component as Starboard Value LP made a $500 million investment in RBA.

On Tuesday Ritchie Bros. (RBA) announced plans to pay $1.08 a share special dividend upon closing of IAA (IAA) deal.

News of the preliminary voting results were first reported by Reuters.

RBA holders Janus Henderson, Luxor Capital and Eminence Capital have come against the deal, while IAA holder Ancora has supported it. Franchise Partners and Eagle Asset Management, which together own ~8% of Ritchie Bros. (RBA) shares, are supportive of the transaction.

Last Friday one of Ritchie Bros. (RBA) top 15 holders, Vontobel Asset Management, said it supported the company's planned purchase of IAA IAA.

A Jefferies analyst in a note Wednesday that that IAA (IAA) shares may trade in the mid $30s a share in the event that the Ritchie Bros. (RBA) deal was blocked.