Infomedia share price halted amid takeover approach

Infomedia is a takeover target

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an attractive woman gives a time out signal with her hands, holding them in a T shape, indicating a trading halt.

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Key points

  • Infomedia shares have been placed in a trading halt on Friday
  • This follows the receipt of a takeover approach this morning
  • TA Consortium appears to be the likely suitor based on an initial substantial shareholder notice

The Infomedia Limited (ASX: IFM) share price isn’t going anywhere on Friday morning.

Just before the market open, the automotive industry software company’s shares were placed in a trading halt.

Why is the Infomedia share price in a trading halt?

The Infomedia share price was placed in a trading halt at the company’s request this morning while it prepares to make an announcement.

According to the request, that an announcement will relate to the receipt of a takeover approach. It explained:

The trading halt is requested pending the release of a material announcement by the Company in relation to receipt of a formal change of control proposal from an Interested Party.

The Company requests that the trading halt remains in place until the earlier of the time the Company makes an announcement in relation to the proposal, or commencement of trading on Tuesday 17 May 2022.

Who is attempting to acquire Infomedia?

Infomedia hasn’t revealed who has tabled the change of control proposal. However, it did release a separate announcement this morning which revealed a new substantial shareholder.

According to the release, the TA Consortium has become a substantial shareholder with 54.3 million shares. This equates to a ~14.5% stake based on Infomedia’s 375.76 million shares on issue.

Based on the release, the consortium appears to comprise Boston-based private equity firm TA Associates and Australian Viburnum Funds.

TA Associates, which has over US$47 billion of assets under management, has a track record of investing in technology shares, so it would be a likely suitor for Infomedia. Furthermore, it is no stranger to Australia. Last year it made a major investment in ETF provider BetaShares.

As things stand, no details have been released in respect to the proposal. Stay tuned for that on Tuesday.

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. has positions in and has recommended Infomedia. The Motley Fool Australia has recommended Infomedia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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