The Bravura Solution Ltd (ASX: BVS) share price climber 7.05% higher yesterday as the market continues to adjust to Friday's GBST Holdings Ltd (ASX: GBT) takeover bid.
What are the details of the takeover bid?
On Friday morning, Bravura made an announcement that it had received an unsolicited, non-binding indicative proposal to acquire 100% of the ordinary shares of GBST via a cash or cash and scrip alternative offer of $2.50 per GBST share.
The indicative proposal is highly conditional including relevant approvals, completion of due diligence to Bravura's satisfaction, change of control consents and execution of a Scheme Implementation Agreement on acceptable terms.
The proposed consideration comprises $2.50 per share in cash consideration less up to $0.35 per share in the form of a special dividend payable to GBST shareholders prior to completion of the transaction to the extent that GBST is legally entitled to make such a dividend and elects to do so.
Is Bravura in the buy zone?
The Bravura share price closed 7.1% higher at $5.77 per share which follows Friday's 2.3% move higher.
It's unusual to see an acquirer's share price climb higher as investors usually discount its shares based on the potential to not realise estimated synergies and potentially erode shareholder value.
For its part, the GBST share price shot 22% higher on Friday to $2.43 per share, just shy of the $2.50 per share consideration.
Bravura looks quite pricey on a relative value perspective as it currently trades on a P/E multiple of 45.9x compared to an average of around 16x earnings for the S&P/ASX200 Index (ASX: XJO).
The stock hit a new 52-week high of $5.81 per share during yesterday's trade before closing slightly lower and I'm not sure it's the best value play in the Information Technology sector at the moment.
I'd prefer to add the likes of Appen Ltd (ASX: APX) or Altium Ltd (ASX: ALU) which have been soaring higher so far this year buoyed by strong US tech performance and continued earnings growth.
For those who want to find the next hot growth company, this top-rated stock could boost portfolio gains as it continues to soar in a $22 billion industry.
