Altium rejects $5 billion bid by US tech giant Autodesk
ASX-listed software maker Altium has knocked back a $5 billion takeover offer from US design technology heavyweight Autodesk, saying the bid undervalued the company’s growth potential.
The rejection from Altium, which develops software used to design electronic circuitry for a host of goods connected to the internet, comes despite a slew of recent downgrades announced by the company.
Altium is one of the five heavyweight technology stocks on the ASX and was valued at $3.6 billion before Autodesk’s pursuit was made public, with its shares trading at $27.21. Investors welcomed Autodesk’s interest in Altium, with shares soaring to a high of $38.26 – up more than 38 per cent – on the back of the news.
The stock had traded as high as $42 last year before the company downgraded its revenue targets.
Altium chief executive Aram Mirkazemi pivot to cloud-based services will set up the company’s next leg of growth. Credit:Ben Rushton
Altium’s board said on Monday it had received a non-binding, indicative and unsolicited proposal from Autodesk offering $38.50 per share via a scheme of arrangement. It said the offer evolved from a dialogue about a strategic partnership with the $US62 billion Autodesk, which is known for its computer-aided design software AutoCAD.
It added that Autodesk’s offer “significantly undervalues Altium’s prospects and therefore rejects the proposal at the current price.”
According to executives involved in the talks, who are not authorised to speak publicly about the offer, Autodesk approached Altium earlier this year. The talks covered a range of options including a partnership where Autodesk would have taken a stake in Altium, or a takeover.
Altium has recruited Goldman Sachs for its defence while Morgan Stanley is advising Autodesk.
Altium said it has a unique position in the electronics ecosystem and noted that in the past, unsolicited acquisition interest has developed from partnership dialogue with other parties in the ecosystem.
“As consistent with past unsolicited acquisition interest, the Altium Board will engage with interested parties in the context of an appropriate valuation of Altium and it will continue to review all potential strategic alternatives for the Company,” it said in a statement to the market.
Altium has struggled with the pandemic last year, and 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 per cent 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. The company has described its long-term goal is to create a digital platform to manage the design, manufacture and distribution of goods for the $US2 trillion global electronics industry.
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