A rival offer for mobile messaging software business Whispir has been met with a large level of scepticism by the target’s investors, who aren’t convinced the suitor is credible or has the funding to follow through on a deal.
Whispir said on Tuesday it received a “letter of intent” from Zipline Cloud, otherwise known as Pendula, that it was planning to put forward an offer to trump the one from Soprano, which values the company at 48c a share or $63m.
On Tuesday, while the shares closed 11 per cent higher at 54.5c, this was not much higher than what is already on the table from Soprano.
Pendula told Whispir that its proposed non-binding indicative offer would be at a premium to the bid price under the Soprano offer of 48c per Whispir share.
Its intention was to execute the acquisition of Whispir shares through a scheme of arrangement structure, an acquisition of Whispir’s main undertaking or a combination of the two acquisition structures.
The consideration proposed to be offered by Pendula is expected to be either all cash or, alternatively, a combination of cash and scrip.
Pendula is a strategic party and has undertaken preliminary due diligence on the Whispir business, the company said.
It expects to submit the proposal as an alternative to the Soprano offer by close of business on Friday December 8.
The Whispir board says take no action.
One shareholder told DataRoom “what was announced was very light-on for sure” and the share price had hardly moved.
The questions they said they would be asking are: Does the bidder have the money? And what’s the structure of the deal?
They believe it’s likely the company wanted to get something out on the rival bidder to urge shareholders not to sell out.
Meanwhile, Whispir also released its target statement on Tuesday, saying shareholders should reject the offer on the table from Soprano, with independent expertise valuing the business at between 48.6c and 56.5c a share.
Soprano had been keeping an eye on rival Whispir for some time, but it’s only now a deal makes sense from a price perspective.
Whispir shareholders have been frustrated with the operation of the business and its capital raising so are eager to see a deal occur.
One market observer said Whispir’s product and business had a lot of potential and like Soprano, Whispir had been enduring a post-Covid trading lull.
Most believe it makes strong strategic sense for Whispir to join forces with Soprano.
One interesting dynamic is Telstra is a customer to both parties, so if they merge, it could create more bargaining power against the telco.
It’s not a large amount of Telstra’s revenue but it secures SMS fees and a proportion of their revenues.
Soprano is run by former Appen Group boss Mark Brayan and private equity firm Potentia is providing $16m of the funding for the offer.
Soprano has already amassed a 15 per cent stake in Whispir, with Spheria Asset Management selling its 7.6 per cent interest in the AustralianSuper-backed company last month.
Effectively, the deal sees Soprano buy Whispir’s software.
Jarden is working for Soprano, while RBC is advising Whispir.
The offer was a 92 per cent premium to the issue price of 25c per share under Whispir’s recently completed $3.25m private placement, as announced to the ASX on October 23, and a 60 per cent premium to the closing price of Whispir shares on November 3 of 30c per share.
Some expect more buyouts in the technology space to come, with many private equity firms picking the bottom of the market after the sell-off this year.
During the pandemic, shares in Whispir traded over $4, but by July this year, they had fallen to about 26c.
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