Nitro share price halted amid improved takeover bid

The anticipated bid represents a 59% premium to the stock's last undisturbed price.

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Key points

  • The Nitro share price is halted on word private equity firm Potentia intends to lodge a $1.80 per share takeover bid today
  • The offer marks a 13.9% improvement on the firm's previously rejected $1.58 per share bid for the ASX tech stock
  • Potentia says its anticipated $1.80 offer is final as long as no competing bid is posted or its granted full due diligence 

The Nitro Software Ltd (ASX: NTO) share price is on ice on Friday as the company prepares to receive and respond to an improved takeover offer from Potentia Capital Management.

The bidder, which is also the company's largest shareholder, plans to put forward a $1.80 per share acquisition offer. That's 13.9% higher than its previously rejected $1.58 per share bid.  

The $1.80 per share bid values the tech company at around $440 million.

The Nitro share price last traded at $1.73. It will return to trade on the company's response to Potentia's intended bid or Monday's open, whichever comes first.

The All Ordinaries Index (ASX: XAO) constituent was recently rumoured to be gearing up to announce an acquisition offer this morning.

Let's take a closer look at Potentia's latest move in the battle for control of the document productivity company.

Nitro share price frozen amid new takeover bid

The Nitro share price was halted this morning after the company received word of Potentia's intention to put forward a new and improved off-market takeover bid. And this time it's final.

The firm says its anticipated offer will only be bumped if another proposal emerges or its granted full due diligence.

Potentia has a 19.8% stake in the All Ords tech stock. It has vowed to vote its stake against any competing offers.

The $1.80 cash offer represents a 59.3% premium to Nitro's undisturbed share price of $1.13 on 29 August. The stock last traded above $1.80 in February and boasts a 52-week high of $4.

In rejecting the firm's previous offer, the company said the bid was "highly opportunistic … at a time of significant share market volatility and cyclical weakness in global technology company valuations."

Potentia managing director Andrew Gray commented on the firm's anticipated offer, saying:

This bid is a demonstration of our commitment to Nitro, its team, and to the strategy they are pursuing under the strong leadership of [co-founder and CEO] Sam Chandler and stewardship of the board.

We are specialist investors in the technology and software sector, and we have been on the same journey of building great companies which Sam and his team are currently treading. We believe we have real value to add as partners in their growth.

The firm said it intends to lodge its $1.80 per share bid for Nitro today. It expects the offer to open in around a fortnight.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nitro Software Limited. 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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