RBC Capital Markets analyst Wei-Weng Chen notes that Qoria’s shares are currently trading approximately 40 per cent below the terms outlined in its proposed merger with Aura, another technology company. Spot foreign exchange rates are adding a further 1 per cent headwind to the situation. Qoria provides cybersecurity solutions to schools, helping them to protect students online. The merger aims to create a larger, more competitive entity in the tech sector.
According to Chen, if the $US75 million placement occurred at current spot pricing rather than the previously announced $12.38 per CDI, the resulting dilution could increase from 3.6 per cent to 6 per cent. Simultaneously, escrowed shares would also see an increase, rising to 27.4 per cent. These factors contribute to investor uncertainty surrounding the deal.
Furthermore, the analyst suggests that, based on the calculated market capitalisation, free float, and S&P buffer rules, the merged entity, trading under the ticker AXQ, is unlikely to meet the necessary requirements for inclusion in the ASX 200 index. This potential exclusion could impact the stock’s visibility and appeal to institutional investors.
Chen concludes that the current market valuation suggests that investors are “pricing in significant execution and equity risks” associated with the merged entity, despite the merger implying a market capitalisation of approximately $1.8 billion. Qoria’s shares have decreased by 29 per cent since the beginning of the year, with a further 0.7 per cent decline recorded on Wednesday.
