The Symbio Holdings Ltd (ASX: SYM) share price is rocketing higher on Wednesday.
In morning trade, the ASX All Ords share is up 18% to $2.75.
Why is this ASX All Ords share rocketing?
Investors have been scrambling to buy this cloud communication company's shares after it received a ~$243 million takeover approach from connectivity services provider Superloop Ltd (ASX: SLC).
According to the release, Superloop has tabled an offer that values Symbio at $2.85 per share. This comprises $1.425 cash and 2.14 Superloop shares for each Symbio share.
Symbio shareholders would also be able to elect to receive the proposed purchase price in the form of cash or Superloop shares by way of a mix and match option under the scheme of arrangement. This is subject to scale back to achieve an overall consideration maximum of 50% cash, including any dividends paid.
The release also notes that the indicative proposal contemplates a fully franked dividend to Symbio shareholders prior to scheme implementation of up to $0.35 per share, implying a release of franking credits of up to $0.15 per share.
Including the $0.15 per share from the release of franking credits, the offer increases to $3 per share.
This means that Superloop's offer for the ASX All Ords share is a premium of 19.7% (or 26.1% including franking credits) to its last close price.
Though, it is worth noting that it is still well short of its 52-week high of $4.55. So, this offer could arguably be seen as opportunistic.
What was the response?
The Symbio Board believes that there is sufficient commercial merit in the indicative proposal to enter into the exclusive period for mutual diligence.
However, it notes that it would only progress the indicative proposal on a disciplined basis such that any transaction would be in the best interest of Symbio's shareholders.
It also warned that there is no certainty at this stage that the indicative proposal will progress to a proposal to be considered by Symbio shareholders. In the meantime, shareholders do not need to take any action and the board will update shareholders as appropriate.
Finally, the ASX All Ords share revealed that it is on track to achieve FY 2023 EBITDA at the upper end of its stated guidance. This will be in the range of $27 million to $28 million.
