The Pushpay Holdings Ltd (ASX: PPH) share price has gone into a trading halt on a possible takeover approach.
If you haven’t heard of Pushpay before, it’s a business that provides church management and donation tools.
Potential takeover
The company has gone into a trading halt after advising that it has recently received unsolicited, non-binding and conditional expressions of interest or approaches from third parties that want to buy the business.
Goldman Sachs has been appointed to assist the ASX share as financial advisor, though Pushpay noted that there is no certainty that these expressions of interest or approaches will result in any transition.
Pushpay also pointed out that before the market opened, ‘associated interests’ of BGH Capital and Sixth Street released substantial product holder notices to the New Zealand stock exchange, where those parties disclosed a total holding of Pushpay shares of 20.343% as a result of an agreement between them where they have agreed to work together about potentially acquiring Pushpay.
What’s going to happen next?
Firstly, investors will want to hear what BGH and Sixth Street have to say about the bid. How big is the potential bid – does the offer suggest a substantial premium to the last trading price of the Pushpay share price?
Often, bids have to be at least 20% higher than the current level to be acceptable to shareholders for control of the entire business.
Early bids often come with a number of conditions such as doing due diligence and getting financing for the deal.
As Pushpay said, a deal is not guaranteed. A month ago, the company announced that it had received an expression of interest.
However, the company will continue to operate as normal for shareholders. Nothing is certain until a solid bid is announced.
My thoughts on this for the Pushpay share price
I’m not surprised that bidders are interested in the business. It has dropped 37% since November 2021, but the company continues to grow. I think Pushpay has long-term profit growth potential, whether that’s as an ASX share or a private business.
If I were a shareholder, I’d be happy to see that other investors place the value of the business higher than where it is today.
There are other ASX growth shares that could also be good value after the recent share market difficulties.
