The GBST Holdings Limited (ASX: GBT) share price is going nuts this morning after the company received a takeover offer.
GBST is a technology business that provides services for leading capital market, broking, banking, financial services and wealth management brands. It was founded in 1984 and now claims to be the market leader in Australia and New Zealand. It also operates in Asia, the UK and North America.
Why The GBST Share Price Is Going Nuts
Bravura Solutions Ltd (ASX: BVS) is another wealth management software business and it has lobbed a bid for GBST. Bravura’s takeover offer is a non-binding indicative proposal, which has sent the GBST share price up 17%.
The takeover proposal comprises a cash payment of $2.50 per GBST share, less any amount paid as a special dividend, up to $0.35 per share. Up to $0.15 per share in value is potentially available to shareholders in the form of franking credits.
Bravura has calculated that the proposal is a 36.9% premium to the volume-weighted average price (VWAP) between the release of GBST’s FY19 half year result which was announced on 13 February 2019 to 11 April 2019. It is also at a 30.4% premium to the 30-trading day VWAP to 11 April 2019.
As an alternative, GBST shareholders could receive $0.35 cash per share, less any special dividend amount, and 0.4095 Bravura shares for every GBST share. However, there is a cap to this where the total number of Bravura shares issued won’t exceed 16.4 million.
There are three core points why Bravura believes this is an attractive offer:
- An attractive premium for the share price
- Certain value, which is delivered through a cash payment rather than a fluctuating share price
- Reduced uncertainty, due to the fact that Bravura believes GBST has to heavily invest to renew its software and be up to date with the ASX CHESS change to blockchain technology.
There’s no guarantee this will go ahead as it’s subject to a number of conditions, including due diligence and regulatory approvals.
Bravura has been a strong performer for shareholders over the past couple of years, so it could be one to watch along with the rapid ASX growth shares mentioned in the free report below.
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