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GBST halts trading on the ASX after new takeover bid

Takeover agreement

Trading in GBST Holdings Limited (ASX: GBT) securities has stopped this afternoon as the company requested a trading halt following an unsolicited takeover bid from a United States (US)-based technology company.

What did GBST say about the trading halt?

The trading halt was requested by the company pending an announcement by GBST in relation to an unsolicited, non-binding, indicative and conditional proposal in relation to a potential acquisition of GBST.

GBST has requested that the trading halt remains in place until the earlier of GBST making an announcement to the market regarding the proposal, or the start of trade on Wednesday 3 July.

So what was in the takeover offer?

Before entering the halt, GBST shares had climbed 4.73% higher to $3.10 per share after the approach by NASDAQ-listed SS&C Technologies Holdings, Inc. (NASDAQ: SSNC).

The US company put in a non-binding proposal for the Aussie wealth management software company at $3.25 per share, 25 cents per share higher than Aussie competitor Bravura Solutions Ltd (ASX: BVS) was willing to pay in its own bid.

The $3.25 per share bid values the equity of GBST at approximately $221 million and represents a 74.1% premium to the shares’ 30-day volume-weighted average price (VWAP) up to 11 April 2019 (pre-takeover speculation).

While the proposal remains conditional on a number of factors, following satisfaction of these, the GBST Board intends to unanimously recommend the proposal to shareholders in the absence of a superior proposal.

Where is Bravura in all of this?

Bravura has previously bid $3.00 per share for GBST, but fell short of the offshore bid for the fund administration software company.

In its own update to the market following the SS&C bid, Bravura confirmed that it had not executed a process and exclusivity deed with GBST by the deadline and therefore did not make an updated proposal.

Bravura noted it reserves the right to make further offers to acquire GBST including in the event of a superior proposal from any third party, but it looks like SS&C is well and truly the front-runner to acquire the company at this point.

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Kenneth Hall 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.

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