The Nitro Software Ltd (ASX: NTO) share price shot out of the blocks this morning, catapulting by as much as 41%.
At the time of writing, Nitro shares are trading at $1.57 each, a 39% jump on yesterday's last price of $1.13 a share.
After the Nitro share price went into a trading halt yesterday, the ASX-listed software company reported an indicative takeover approach.
Let's find out what all the fuss is about and why the Nitro share price is skyrocketing today.
Key offer details
Potentia Capital Management Pty Ltd, together with its co-investor HarbourVest Partners, LLC (Potentia Consortium), submitted an unsolicited, conditional, and non-binding proposal to acquire 100% of Nitro at $1.58 cash per share.
The takeover offer is subject to a six-week due diligence period, access to transaction documents including third-party and regulatory consents, as well as Nitro board approval.
The Potentia Consortium currently holds 41.4 million shares in Nitro, representing 17% of total capital.
Nitro turns down the offer
Nitro has decided to decline the indicative offer based on a number of reasons.
Firstly, the recent volatility across the equity market where growth stocks have been particularly hit hard does not present a timely opportunity.
Secondly, the board deemed the offer inadequate given that Nitro is one of only two software companies in the world to provide a proven enterprise-grade [software as a service] SaaS PDF productivity and eSigning platform.
In relation to the $1.58 per share offer, Nitro advised this equates to a 61% discount to a 52-week high Nitro share price of $4.00 per share on 17 November 2021 and an 18% discount to the 12-month volume-weighted average price of $1.93 per share to 29 August 2022.
Management is still open to receiving further proposals that more appropriately compensate shareholders and reflect the underlying value of Nitro.
Nitro share price snapshot
As mentioned previously, the Nitro share price has taken a battering in the last year, plummeting 53% but today's announcement has propelled a 41% jump in the last month.
In contrast, the S&P/ASX 200 Index (ASX: XJO) has declined by 7% in the last year, and is down 0.11% in the past month.
The company's market capitalisation has risen to around $381 million.
