The Motley Fool

GBST provides update on Bravura Solutions takeover proposal

The GBST Holdings Limited (ASX: GBT) share price will be on watch this morning after providing an update in relation to the Bravura Solutions Ltd (ASX: BVS) takeover proposal.

What was in the update?

For those that aren’t aware, on April 12 Bravura Solutions tabled a $2.50 cash per share non-binding indicative takeover proposal.

This was a 36.9% premium to the trading day volume-weighted average price (VWAP) from the release of GBST’s half year results on February 13 to April 11. It was also a 30.4% premium to the 30-trading day VWAP to April 11.

In its release, Bravura stated that it believes the proposal provides a number of benefits to GBST shareholders. These include an attractive premium, certain value, and reduced uncertainty.

The latter was in respect to the uncertainty and costs associated with the significant investment to renew GBST’s software platforms. This includes the E-VOLVE program to bring its Composer platform to modern standards and the changes required as part of the ASX CHESS transition to blockchain technology.

However, GBST’s update reveals that some shareholders aren’t convinced by the offer.

According to the release, the board and its advisers are still conducting a careful assessment of the proposal, but note that “a number of shareholders have expressed concerns with respect to aspects of the Indicative Proposal which go to value and certainty.”

This includes Bravura’s “request to conduct due diligence to its satisfaction, particularly in light of the fact that it is a direct competitor of GBST.”

As a result, the board has engaged with Bravura and its advisers to further understand its position.

For now, the board advises that shareholders continue taking no action in relation to the proposal and will continue to keep the market informed of any material details in accordance with its continuous disclosure requirements.

What now?

Whilst this update casts a doubt on the takeover, I remain optimistic that a deal will be reached in time.

However, due to the uncertainty that this update has created, investors may want to sit tight and wait for further developments before considering an investment in either company.

These 3 stocks could be the next big movers in 2020

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd and GBST Holdings Limited. 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 Scott Phillips.

Related Articles...

Latest posts by James Mickleboro (see all)