Altium (ASX:ALU) share price bounces back after responding to media speculation

It has been an eventful day for this tech share…

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Make a comeback

The Altium Limited (ASX: ALU) share price has certainly had an eventful day on Monday.

After being down as much as 14% to $31.47 at one stage this morning, the electronic design software provider’s shares have recovered almost completely.

In afternoon trade, the Altium share price is down just 1.5% to $35.96.

Why is the Altium share price so volatile today?

Investors were selling down the Altium share price this morning amid media reports claiming that the company had rejected a second takeover approach from Autodesk.

The reports claimed that the US software giant returned with an improved offer of $40.00 per share, which was promptly rejected. This compares to Autodesk’s June offer of $38.50 per share, which was rejected by the Altium board on the belief that it significantly undervalued the company’s prospects.

One of the reports suggested that the second rejection could be the final straw for the US based software and that it would be withdrawing its interest. This is what sparked the sizeable decline in the Altium share price this morning.

The rebound

However, these reports turned out to be incorrect, leading to a sharp rebound in the Altium share price after it returned from a paused in trading late this morning.

Altium responded to the speculation, stating that Autodesk had not returned with a better offer.

The company released a statement saying: “In response to media speculation today, Altium Limited advises that it has not received any further offer from Autodesk. All details relating to the Autodesk offer have been disclosed by the Company in its ASX announcement released to the market on 7 June 2021.”

Judging by the rebound in Altium’s shares, some investors appear to believe this means there is still a chance that Autodesk could return with a greater offer in the future.

Though, given that the Altium board previously said that Autodesk’s $38.50 per share offer “significantly” undervalued its prospects, it may need to be higher than the one speculated today.

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Motley Fool contributor 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 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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