The Altium Limited (ASX: ALU) share price has come under pressure on Wednesday.
In early trade, the electronic design software company’s shares were down as much as 5% to $32.75.
The Altium share price has recovered slightly but remains down 2.5% to $33.70 at the time of writing.
Why is the Altium share price under pressure?
Investors have been selling down the Altium share price after Autodesk confirmed that it had ended takeover talks.
And while Autodesk actually announced this yesterday (Australian time), only today does it appear to have caught the eye of investors.
What has been happening?
Last month Autodesk tabled a ~$5 billion or $38.50 per share offer to acquire the company. This was swiftly rejected by the Altium board on the belief that it undervalues its prospects.
The Altium board believes the company is well-positioned to achieve its bold growth targets over the coming years. It is aiming to more than double its revenue to US$500 million and grow its subscribers to 100,000 by 2025.
It explained: “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.”
What’s the latest?
The latest is that Autodesk has confirmed that it has ended talks with Altium.
The software giant told Reuters: “We are not commenting on matters with Altium but can confirm that acquisition discussions have ceased at this time.”
Investors appear to have been hoping that Autodesk would return with a better offer, which until recently had kept the Altium share price trading close to the original takeover approach. However, with Autodesk signalling that takeover talks are over, Altium shares are now losing support and under significant pressure.
So much so, the Altium share price is down 10% over the last five days.