* Northgate to buy Redde for about 394 mln stg in shares
* Northgate CEO leaves, to be replaced by Redde's CEO
* Northgate H1 pretax profit falls 14%
* Shares in Northgate fall, Redde's gain
(Adds shares, deal details, financial advisers)
By Yadarisa Shabong
Nov 29 (Reuters) - Commercial vehicle rental firm Northgate
Plc has struck a deal to buy Redde Plc for
about 394 million pounds ($505 million) in shares, expanding
into accident claims services in an attempt to revive growth.
Northgate also announced on Friday the immediate departure
of its chief executive, Kevin Bradshaw, who will be replaced by
Redde's CEO Martin Ward when the deal closes. Northgate did not
give a reason for Bradshaw leaving.
"The combination will create a champion automotive services
business with scale, reach and resources to provide mobility
solutions to a broad customer base," said Northgate's
non-executive chairwoman Avril Palmer-Baunack.
At 1020 GMT, shares in Darlington, northeast England-based
Northgate were down 5.6% at 330.5 pence, partly due to the
planned issuance of new shares. Northgate also reported a 14%
drop in first-half profit. Redde shares were up 3.5%.
Under the deal, Redde shareholders will get 0.3669 new
Northgate shares for each share held. That translates to 128.4
pence per share, a premium of 18% to the stock's Thursday close.
Palmer-Baunack took over as chairwoman in August, after
Northgate removed her predecessor following months of pressure
from activist investor Cyrstal Amber calling for him to go.
After closure of the deal, Northgate shareholders will own
54% of the combined company, while 46% will be held by Redde
shareholders, the companies said.
Northgate, which operates in the United Kingdom, Ireland and
Spain with a fleet of around 100,000 vehicles, will add Redde's
fleet of about 7,000 vehicles and have access to 50,000 more
though its rental partnerships.
Ward has led Redde, formerly known as Helphire, for the last
14 years. The company offers a number of accident management
services, including vehicle replacement, repair and full
claims-handling assistance.
Northgate said it expected the merger to generate pretax
cost savings of at least 10 million pounds per annum, with
revenue synergies expected from the combined group's ability to
cross-sell products and services to customers.
J.P. Morgan Cazenove was the sole financial adviser to
Redde. Goldman Sachs and Barclays jointly advised Northgate.
($1 = 0.7794 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by
Subhranshu Sahu and Mark Potter)
