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The chair of mobile donations company Pushpay hopes its shareholders can see value as its board recommends a takeover deal seen as cheap by some analysts.
Australian private equity firm BGH Capital and US investment company Sixth Street, [https://www.rnz.co.nz/news/business/477597/billion-dollar-takeover-deal-announced-for-mobile-donations-company-pushpay-holdings
offered $1.34 a share for Pushpay], valuing the company at $1.54 billion.
Pushpay chair Graham Shaw said shareholders can benefit from the deal.
"I think what makes it compelling [which is] a slightly subjective term, our view is it gives shareholders an opportunity should they wish to recognise value without the execution risk that's always evident with business."
Responding to criticism that the offer is opportunistic and cheap compared to its historic trading range, Shaw said shareholders had to look at the big picture.
"I think we're all well aware that tech stocks in the last 12 months have taken a fairly significant hammering. Many are sitting at half what they were a year ago.
"In that context this offer, which is a 30 percent premium to the price before announcement of takeover interest (22 April), is reasonably compelling," Shaw said.
The deal is being done through a scheme of arrangement rather than through the Takeovers Code, but still requires shareholder approval.
Under the scheme Pushpay is not allowed to solicit other offers but if there were others, the company was required to inform the current bidder, Shaw said.
If the deal with BGH Capital and Sixth Street were to fall over it would be "business as usual" he said.
Pushpay has already warned that underlying earnings will be about 10 percent lower than a year ago because of higher costs.
The company will report its first-half results next week.