Bigtincan Holdings Ltd (ASX: BTH) shares are catching the eye on Wednesday.
In morning trade, the small cap ASX stock is up 20% to 20 cents.
Why is this small cap ASX stock jumping?
The catalyst for this gain has been news that the sales enablement platform provider has received a new takeover approach.
As a reminder, in June, Bigtincan rejected a 19 cents per share non-binding offer from Vector Capital Management. It then returned with an improved offer of 20 cents per share last month.
Well, it seems that management was right to reject the offer in June. That's because this morning it has received a significantly better offer from NASDAQ-listed Investcorp India Acquisition Corp (NASDAQ: IVCA).
Investcorp India Acquisition Corp (IVCA) is sponsored by Investcorp, which is a leading global alternative investment firm with approximately US$53 billion of total assets under management.
According to the release, IVCA has made a non-binding proposal for a business combination.
Under the proposal, all of the shares in Bigtincan would be exchanged for shares in a newly formed Cayman Island holding company at an implied equity value of US$275 million (~A$400 million).
This is the equivalent of approximately A$0.472 per share at current exchange rates, which represents a 195% premium to where the small cap ASX stock ended yesterday's session.
In addition, the company notes that the proposal envisions a partial cash election opportunity at A$0.2352 per share. This is subject to availability of funds and a scale back mechanism.
If the deal were to go ahead, it would result in the newly formed Cayman Island holding company being listed on the NASDAQ and owning Bigtincan and IVCA.
Though, the proposed transaction is conditional on entering into a business combination agreement, a scheme implementation deed, and a number of ancillary agreements.
The proposed transaction would, if implemented, result in Bigtincan shareholders owning up to 75% of the newly formed company immediately following implementation of the transaction. This is subject to cash elections.
If everything goes to plan, the proposal targets a completion by March 2025. After which, the small cap ASX stock would be listed on the NASDAQ and delisted from the ASX.
What now?
Bigtincan is currently evaluating the recently announced 20 cents per share offer from Vector Capital Management.
It will now evaluate the offer against the IVCA Proposal and determine which, if any, is in the best interests of shareholders to further progress.
In the meantime, the small cap ASX stock advised shareholders that they do not need to take any action in respect of either proposal. It also warned that there is no certainty any transaction will eventuate from either proposal.
