Australian Bapcor said it intended making a cash takeover offer for 100% of Hellaby at $3.30 a share.
The takeover price was at a modest 6% premium to Forsyth Barr's 12-month target price, he said.
''We believe material benefits could be available to Bapcor simply from the material Hellaby corporate overhead. We recommend investors wait for the independent report before taking any action.''
Three shareholders had entered into a lock-up arrangement relating to the intended offer for a total of 29.8% of shares on issue. However, it was noted more than 27% of those shares were from one shareholder, Castle Investments, Mr Foster said.
The offer price represented a 9% premium on Monday's closing price and a 14% premium to its 30-day volume-weighted average price. The premiums were below the historical median takeover premium in the New Zealand market.
The key drivers for the acquisition for Bapcor was Australian and New Zealand economic growth. Major sector exposures were commercial transport, passenger vehicles and agriculture and forestry.
Hellaby would be a bolt-on acquisition related to the company's core business divisions.
Hellaby's Contract Resources had successfully entered new markets and was offering growing services to existing customers.
Other key company and industry issues included the return on capital, Mr Foster said.
Hellaby had historically generated, and was forecast to generate, a return on invested capital in excess of its weighted average cost of capital (WAAC) of 10.1%.
''Hellaby has a mandate and capacity to grow but suitable acquisition targets have been difficult to find.''
Hellaby managing director Alan Clark said the board saw more value in the automotive and resources services investor than the ''opportunistic'' $322.5 million takeover bid from Bapcor.
The company was blindsided by Bapcor, getting a phone call from Bapcor less than an hour before Hellaby lodged a notice to the stock exchange.
Mr Clarke cancelled the rest of his investor roadshow to fly back to Auckland and formulate a response to the offer, including the appointment of an independent adviser.
''The board is quite clear that we believe that the value attributed in the offer undervalues Hellaby.
''We have heard the commentary that it's opportunistic and we don't disagree with that. We see the value as significantly more than that,'' he told BusinessDesk.
Mr Clarke joined Hellaby in November last year, having headed up medical services investor Abano Healthcare where he fended off multiple takeover bids.
Since then, Mr Clarke has worked hard to reshape the company's portfolio to stop it being identified as a diversified investment firm, an investment type out of favour with analysts who struggle to value future earnings for a broad array of businesses.
That has seen Hellaby organise the sale of its equipment business to Maui Capital for $81million, which will settle at the end of the week, buy maintenance and engineering contractor TBS Group to bolster its resources services unit, and appoint consultants to try to improve the fortunes of the footwear division which is still marked for sale.
''There was a good response by the market to the new strategy, direction and process, so prior to any Bapcor involvement we were sitting at $3.20 [including dividend] and that was an endorsement.
''In relation to that strategy, we have engaged with all of the parties, including the lock-up parties. We've spoken to them about the strategy, we've articulated direction and so on. There has been a frustration by a number of holders at the lack of progress within the share price,'' Mr Clarke said.
