The Isentia Group Ltd (ASX: ISD) share price has been one of the best performers on the Australian share market on Tuesday.
In morning trade, the media intelligence services provider's shares are up over 150% to 17.5 cents.
Why is the Isentia share price rocketing higher?
Investors have been bidding the Isentia share price higher today after it announced that it has entered into a binding scheme implementation deed with AIM-listed Access Intelligence.
Access Intelligence is an UK-based technology led company delivering SaaS products that address the fundamental business needs of customers in the public relations, marketing, and communications industries.
According to the release, under the terms of the scheme implementation deed, Access Intelligence will acquire 100% of the shares in Isentia that it does not already own by way of a scheme of arrangement. This scheme remains subject to shareholder and court approval but is being recommended by the Isentia board.
Access Intelligence has offered 17.5 cents per share in cash, which implies an enterprise value of $67 million for Isentia. This represents a 157% premium to its last close price and a 39% premium to the 12-month volume weighted average price of the Isentia share price.
"Compelling offer"
Isentia directors believe Access Intelligence has made a compelling offer for a number of reasons.
This includes an attractive premium, certainty of value, and limited conditionality. In respect to the latter, the company notes that the offer is subject only to customary conditions and not financing or due diligence.
Isentia Chairman, Doug Snedden, said: "The Scheme is an attractive transaction which provides an all-cash consideration for Isentia shareholders. The Isentia Board has unanimously concluded that the Scheme is in the best interests of shareholders. The price represents a significant premium to the current trading price."
"Access Intelligence's offer provides Isentia shareholders with certainty of value and the opportunity to realise their investment in full for cash. Isentia's operations will also benefit from Access Intelligence's intention to repay senior debt."
This sentiment was echoed by the company's CEO, Ed Harrison. He said: "Access Intelligence has a strong track record in delivering successful products to PR and comms professionals, not least through their powerful social media platform, Pulsar."
"Bringing the companies together will give Isentia's customers access to a broader suite of products. Isentia will continue to invest in its existing portfolio of products including the upcoming launch of the new Isentia platform and completion of the move to real-time broadcast monitoring. For the Isentia team this represents the opportunity to be part of a wider global organisation," he concluded.
The Isentia share price last traded above the offer price in October last year. Since then it has been on a downward trajectory, hitting a record low of 6.6 cents recently.
