The Asaleo Care Ltd (ASX: AHY) share price has started the week on a positive note.
In afternoon trade the personal care products company's shares are up 8% to a 52-week high of $1.41.
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Why is the Asaleo Care share price jumping to a 52-week high?
Investors have been fighting to get hold of Asaleo Care shares amid speculation that another takeover approach is coming.
In December the company received an unsolicited, indicative, conditional, and non-binding proposal from Essity Aktiebolag (Essity) to acquire all the shares in the company.
Essity, a global hygiene and health company based in Sweden, offered $1.26 per share in cash, less any dividends or distributions declared or paid by Asaleo after 9 December.
That offer was subsequently rejected by the board in January on the belief that it fundamentally undervalued the company and was "materially inadequate."
The board advised that it undervalued the company on a standalone basis and didn't take into account its reset of the business. It notes that the latter is creating long term value and putting the company on a path towards sustainable and profitable growth.
Asaleo Chairman, Harry Boon said, "The Independent Board Committee, after careful review, considers that the Proposal fundamentally undervalues Asaleo Care, is materially inadequate and does not reflect the strategic value of the company to Essity. However, the Committee remains open to further engagement."
Second time lucky?
This morning Asaleo confirmed that it is engaged in ongoing discussions with Essity in respect to a potential proposal to acquire the company.
As part of these discussions, Asaleo has granted limited due diligence to Essity. However, management has warned that there is no certainty that this process will result in a transaction. As a result, Asaleo shareholders do not need to take any action.
Management intends to provide a further update with its results announcement on 17 February.
All eyes will no doubt be on the Asaleo share price when that announcement is made.
