Telit Communications PLC‘s (LON:TCM) largest shareholder, asset manager DBAY Advisers, has said it is considering a possible cash offer for the Internet of Things (IoT) specialist of around 190p per share, a 5.9% discount to the firm’s closing price on Thursday.
DBAY, which owns around 15.4% of the AIM-listed firm, said that it had first approached Telit on October 27 with a proposed all-cash offer of 175p per share, representing a 33.6% premium on its closing price that day, however, following discussions with the company’s board it had raised its proposal to the new figure, but added that there is no certainty that a firm offer will be made.
The asset manager also said that it has considered an alternative takeover proposal for Telit made two weeks ago by Swiss computing firm u-blox Holding AG, which is offering the firm’s shareholders u-blox shares with a value of 250p for each Telit share they already own. Telit said at the time that it is considering this proposal.
However, DBAY said under the u-blox deal Telit shareholders would receive shares “with uncertain value” and that it did not believe the offer was compelling and did not intend to accept it. By contrast, DBAY said it believed its own offer represented “a fair and reasonable price and gives Telit shareholders the opportunity to sell their shareholding for cash”.
Shares in Telit were down 4.9% at 192p in early trading on Friday, slightly above DBAY’s revised offer and possibly indicating that investors do not expect a higher proposal to be forthcoming.