SAI Global Limited shares surge 31% on takeover offer: Is it time to sell?

Shares of SAI Global Limited (ASX: SAI) are skyrocketing today after the group received a takeover offer from the Baring Asia Private Equity Fund.

Reports of the takeover were first reported by The Australian Financial Review’s Street Talk column late on Sunday evening, before being confirmed by SAI Global in a market sensitive announcement to the ASX this morning.

Shareholders of SAI Global, which provides information services and solutions for managing risk, as well as helping businesses achieve compliance requirements, will receive $4.75 per share. The amount will be paid out in cash and represents a 32.3% premium to Friday’s closing price.

Indeed, the deal will likely come as a relief for shareholders of the business, who have watched its shares fall sharply over the past 12 months. In fact, the last time the shares traded for $4.75 was just over two years ago in September 2014.

The directors of SAI Global have also unanimously backed the offer in the absence of a superior proposal. At this stage, it seems investors are confident the deal will succeed with the shares soaring 31.2% to $4.71, leaving very little room for error. Some might even be confident that a superior proposal will emerge, with the shares changing hands for a high of $4.78 this morning.

Source: Yahoo! Finance

Source: Yahoo! Finance

Despite the backing of the board, it is still possible that the takeover will not proceed. As likely as it seems the board will approve it, shareholders will still get a say in the transaction, while it will also need the necessary approval from the court and Foreign Investment Review Board.

That said, the shares are now trading within a couple of percentage points of Baring Asia’s generous offer. While a superior offer is also possible, investors may want to take their cash off the table now and put it to work in some of the market’s other attractive opportunities.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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