Amid all the news on Monday of the shock crackdown on money laundering by AUSTRAC involving three major casino companies and the National Australia Bank, we saw two takeover bids emerge for local tech companies worth well over $6.3 billion.
The first was a $1.3 billion takeover bid that emerged from a local private equity company for the billing technology company Hansen Technologies, while the second and larger deal was a $5 billion first shot at Altium from giant American software and computer design group Autodesk.
Altium immediately rejected the offer, saying it was too low. The $US62 billion US group’s offer was for $38.50 for each Altium share.
Altium shares reacted by leaping 40% after they came out of an early trading halt to trade at $38.26. They later eased a little to be up 39% at $37.83.
The statement from Altium didn’t say whether it was an all-cash or cash-and-shares offer.
Altium has recruited Goldman Sachs for its defence after being approached over the weekend. It said in a statement the offer evolved from talks about a strategic partnership with the American company.
Autodesk is an American multinational software corporation that makes software products and services for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries.
“The Altium board appreciates the interest expressed by Autodesk, which has evolved from a dialogue about a strategic partnership,” the company said in a statement to the ASX.
“However, it considers that the Proposal significantly undervalues Altium’s prospects and therefore rejects the Proposal at the current price.”
Altium designs software that designs the electronic circuitry at the heart of a growing range of everyday goods being connected to the internet. It was valued at $3.6 billion with its shares last trading at $27.21 at last Friday’s close.
The stock traded as high as $40 last year before the company hit rough air and downgraded its revenue targets as it struggled to cope with the effects of the pandemic.
Altium missed its $US200 million revenue target for the year. The company said it may take another six to 12 months to achieve its 2025 revenue goal of $US500 million due to the impact of COVID-19.
In January, the company warned of a 3% drop in revenue decline for the December half-year and said it would provide an update on the 2025 target, citing the sale of its Tasking business.
In February, the company posted its first revenue decline in a decade but said it is confident of achieving this target, despite the sale of its Tasking business, but this assumes 10 to 20% of revenue is generated by fresh acquisitions.
Being a large, well capitalised company, all Autodesk has to do is firm up the offer to say around $40 a share and the deal should be done.
Meanwhile the $1.3 billion offer from local private equity group BBGH Capital for Hansen was the usual unsolicited, preliminary, conditional and non-binding proposal to start the bid process.
At $6.50 a share it was a 25% premium to Hansen’s close last Friday and enough to get the attention of the target board.
Judging by the commentary from Hansen, the deal will be done if due diligence works out.
BGH Capital was involved in a long and messy bid for Village Roadshow that got caught up in the Covid lockdowns. It was also one of the more interested parties in Virgin Australia.
Naturally BGH’s offer saw Hansen shares close the gap with a 22% leap and they ended the day at $6.35, under the offer price and confirmation that the market sees the deal as done and dusted.
Hansen is a global customer care and billing solutions provider for energy, pay TV and telco companies
Hansen told the ASX that its board had considered the offer and has determined that progressing the proposal was in the interests of all shareholders.
The cash consideration price will be reduced by the value of any dividends or other distributions declared, proposed or paid after date of the offer letter.
The price also assumes that Hansen achieves its 2021 June 30 earnings guidance.
The directors of Hansen, other than chief executive Andrew Hansen, intend to unanimously recommend the proposal to shareholders subject to the parties entering into a binding scheme implementation deed on terms consistent with the Proposal following completion of BGH Capital’s due diligence.
Mr Hansen has agreed to work together exclusively with BGH Capital to seek to implement the Proposal pursuant to a co-operation agreement.
As part of that co-operation agreement, Mr Hansen has agreed to procure that with respect to Hansen shares that he owns or controls, those shares will be voted in favour of any scheme of arrangement to effect the proposal, and will not be voted in favour of (and will be voted against) any competing proposal during an exclusivity period.