Pushpay provides systems for people to donate to their churches. Photo: 123RF
The $1.54 billion takeover offer for mobile donations company Pushpay Holdings is drawing little enthusiasm from investment analysts, but may yet draw rival offers out of the shadows.
After months of speculation and study the company revealed late on Friday it had agreed to the offer from Australian private equity firm BGH Capital and US investment concern Sixth Street, which own a combined 20 percent.
The offer of $1.34 a Pushpay share, a 12.6 percent premium to its previous traded price was unanimously and strongly backed by directors as offering "compelling value to shareholders".
Forsyth Barr head of research Andy Bowley said it offered only a modest premium on a beaten down share price, given the prices being paid for similar businesses and the current exchange rate.
"It doesn't seem to be a knockout deal in terms of price being paid in our view."
Pushpay was not yet fulfilling its growth objectives, he said.
"It was a Covid beneficiary which may have masked much slower underlying growth rates and that may well be part of the board's thinking and decision to approve the deal."
The deal did leave the "door ajar" for rival bidders to re-emerge, Bowley said.
Jarden Securities analyst Guy Hooper was sceptical of competing bids.
"The company attracted expressions of interest from multiple parties, and while there is the possibility of a higher bid, given the extended time frame ... this appears less likely at this stage of the process."
Both analysts highlighted Pushpay's weaker than expected first half preliminary earnings, which were released alongside the takeover news, pointing to a 10 percent fall in underlying earnings because of higher costs, as well as a lowering of full year earnings range.
Other funds managers, who preferred not to be named, regarded the offer as opportunistic and taking advantage of current weakness in the price of technology stocks.
The deal is being done through a scheme of arrangement rather than through the Takeovers Code, but still requires shareholder approval.