It's been a pretty rough start to the trading week for ASX shares so far this Monday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has dropped by a hefty 0.9% and is back under 7,945 points.
But let's talk about the ARB Corporation Ltd (ASX: ARB) share price. ARB shares are having a fantastic day, in stark contrast to the broader market.
The offroad accessories producer closed at $39.85 a share last week. Today, those same shares opened at $39.50 but quickly rose up to an intra-day high of $42.40 this morning. At the time of writing, ARB has lost a little ground, currently asking $42.31 a share. That's a gain worth a happy 6.17%.
So how is the ARB share price smashing the market by almost 7% today?
Well, we did get some news this morning from the company that might explain why investors are flocking to ARB shares
Image source: Getty Images
Shares soar 6% on takeover news
This morning, ARB released an ASX filing that revealed a major acquisition is in the works.
This filing told investors that ARB's American 'associate' company ORW USA (Off-Road Warehouse) has entered into a conditional agreement to acquire the '4 Wheel Parts' business from Hoonigan.
ARB only acquired a 30% interest in ORW during the 2024 financial year. This transaction will set ORW back US$30 million and see 4 Wheel Parts' 42 retail stores and associated online stores come under the ORW roof.
ARB notes that the takeover agreement is still subject to pending court approval in the United States. However, it also told investors the following:
Should the acquisition proceed, ORW will settle the purchase of the 4WP assets using additional funding provided by its shareholders. These funding arrangements would result in ARB increasing its shareholding in ORW from 30% to 50%.
Additionally, ARB told investors that it would acquire the 'Poison Spyder' customs brand from Hoonigan in a separate transaction for US$1 million, which is also subject to court approval.
So that's all we know for now. However, investors appear to be very excited about the news today, judging by the ARB share price's healthy rise this session thus far.
ARB share price snapshot
The ARB share price has had a relatively successful year in 2024 so far. After today's gains, the company is now sitting on a year-to-date gain of 18%, which stretches to 30% over the past 12 months.
At the current ARB share price, this ASX 200 stock is trading on a price-to-earnings (P/E) ratio of 33.88, with a dividend yield of 1.63%.
