Local Adobe competitor Nitro Software exploded 40% higher today ending the day at $1.58 a share after the tech company received a fresh takeover offer.
Investors globally are looking for undervalued stocks now that equity markets are on a downward trend and valuations, especially in tech stocks, are looking more positive. A well-versed private equity firm Potentia Capital, and its co-investor HarbourVest Partners, LLC (Potentia Consortium), offered an unsolicited, conditional, and non-binding proposal to acquire 100% of Nitro at $1.58 cash per share.
The private equity partners already hold 41.4 million shares in Nitro, representing 17% of total capital. As with all private equity offers, there will be a six-week due diligence period, access to transaction documents including third-party and regulatory consents.
However, the offer has not made it past the Nitro board of directors, and they decided to decline offer.
The primary reason for this is that Nitro believes that the timing of the offer was seemed as quite opportunistic given the fact that equity markets have been on a downtrend since the beginning of the year. Nitro in particulate has over 50% in the last 12 months.
Secondly, the board also stated that they are only two software companies in the world to provide a proven enterprise-grade SaaS PDF productivity and eSigning platform.
Finally, the board also identified the fact that the offer is a 61% discount to a 52-week high Nitro share price of $4.00 per share on 17 November 2021 and an 18% discount to the 12-month volume-weighted average price of $1.93 per share.
Despite all this, the company is still open to any new offers for the company as long as it is in the best interest of the majority of shareholders.