The Hansen Technologies Ltd (ASX: HSN) share price is taking a dive to the downside today.
This follows news that private equity firm BGH Capital has withdrawn its previous acquisition proposal for the billing technology company.
In early morning trade, the Hansen share price is trading 13.13% lower to $5.36.
Why is the Hansen share price on the move today?
Investors have decided to jump the Hansen ship on Monday morning after the company notified shareholders that its previous acquisition proposal from BGH Capital has been withdrawn.
According to the release, BGH Capital has informed Hansen that it has decided to withdraw its unsolicited proposal to acquire the billing company. As a result, all discussions pertaining to the proposal have ceased.
This decision has followed the conclusion of BGH's extensive due diligence. Interestingly, the private equity firm did not specify any specific details as to why it has withdrawn from the proposal.
In fact, BGH appeared to remain positive on the company. The release stated, "BGH Capital has advised the company that it continues to see Hansen as a highly effective organisation with an outstanding management team and strong prospects."
Additionally, BGH reported no issues that Hansen considers material in its current operations and strategy.
Despite this news, it looks as though investors are concerned about the latest announcement, sending the Hansen share price lower. There seems to be a lingering worry: why has the offer been withdrawn if there isn't a material issue?
Furthermore, Hansen Chairman David Trude responded to the news, stating:
The Hansen business continues to go from strength to strength. We were particularly pleased with the strategic customer wins during the year including Telefonica, DISH, Western Power and Nautilus Solar. Significant new business wins, coupled with a continued focus on our aggregation strategy, reinforce our commitment to, and confidence in, our long-term revenue target of $500 million in FY25.
Original acquisition proposal
Originally, BGH Capital put forward a conditional non-binding proposal for 100% of Hansen at a price of $6.50 cash per share. This offer was made on 7 June 2021 which sent the Hansen share price skyrocketing by 22%.
At the time, all the directors of Hansen intended to unanimously recommend the proposal except for CEO Andrew Hansen. For reference, Mr Hansen holds ~17.5% of the Hansen shares on issue, amounting to approximately $216.3 million in value.
Finally, based on the Hansen share price, the company commands a $1.2 billion market capitalisation.
