Altium (ASX:ALU) share price shoots 40% higher on takeover approach

This tech company has received a takeover approach but its board isn’t biting…

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The Altium Limited (ASX: ALU) share price has commenced trade later than normal on Monday and is shooting higher.

At the time of writing, the electronic design software company’s shares are up 40% to $38.00.

What’s happening with the Altium share price today?

This morning the Altium share price was paused earlier today pending the release of an announcement.

That announcement has now been released and reveals that the company has been the recipient of an opportunistic takeover approach.

According to the release, Altium has received a formal, non-binding, indicative and unsolicited proposal from US giant Autodesk, Inc. (NASDAQ: ADSK) for the acquisition of 100% of Altium shares at $38.50 per share by way of a scheme of arrangement.

While this represents a 41.5% premium to its last close price of $27.21, it is also a 4.2% discount to its 52-week high.

Autodesk is a US$62 billion US-based multinational software company that makes software products and services for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries.

What was the Altium response?

The Altium Board has responded to the offer by stating that it appreciates the interest expressed by Autodesk, which has evolved from a dialogue about a strategic partnership.

However, it believes the proposal significantly undervalues Altium’s prospects and therefore rejects the proposal at the current price.

The Altium Board also highlighted that the proposal is non-binding, was unsolicited and is subject to Autodesk performing satisfactory due diligence as well as other conditions. This includes the unanimous support of the Altium Board, which this offer has not received.

Commenting on the future, the Board said: “Altium’s strong track record of setting ambitious long-term goals and achieving them, gives the Altium Board confidence in the Company’s ability to pursue its transformative strategy for the electronics industry and to achieve its 2025 financial goals. Having successfully pivoted to the cloud, Altium is now well positioned to pursue market dominance and industry transformation. The adoption of Altium’s cloud platform is transforming Altium’s business model from maintenance-based subscription to capability-based SaaS subscription.”

The Altium share price is now up 10% year to date following today’s gain.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Altium. The Motley Fool Australia owns shares of and has recommended Altium. 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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