(Alliance News) - Telit Communications PLC on Monday rejected a mooted takeover price from DBAY Advisors Ltd, but said it is continuing commercial discussions with DBAY and u-blox Holding AG about a possible transaction "in the best interests of all shareholders, whether large or small".
On Friday, DBAY, Telit's largest shareholder, said was considering making an offer of GBP1.90 per share for London-based Telit. Later Friday, it said it had acquired 471,516 Telit shares at GBP1.948 per share that same day, and therefore this now would be its minimum offer price for the rest of Telit shares.
Shares in Telit Communications were trading up 0.3% at 201.50 pence in London on Monday. The stock is up 28% so far in 2020.
Telit, which focuses on software for the 'internet of things', on Monday said an offer at GBP1.948 per share would "fundamentally undervalue" the company. It argued that its trading update published in November had "shown resilience despite continued lockdown measures" across the markets in which it operates and that its share price isn't reflecting this resilience.
Telit said the board also believes that markets have not yet given Telit credit for "the fundamental governance, strategic, operating and financial changes in Telit since the events of 2017", when Telit cut ties with its former chief executive officer, Oozi Cats, after reports of his alleged ties with US fugitive Uzi Kats.
DBAY, a UK-based international asset management firm, is the largest shareholder in Telit, with about 20 million shares prior to Friday's purchase, which represents a 15% shareholding. DBAY first approached Telit with a cash offer at GBP1.75 per share in October, which was rejected.
Telit said it is continuing discussions with DBAY and Swiss wireless semiconductors and modules manufacturer u-blox Holding AG for a possible deal, with the latter offering GBP2.50 per share.
The company said on Monday there is "industrial logic in a combination with u-blox" that could create value for shareholders of both companies, but that any combination would need "to be on terms that reflect Telit's financial performance and position, and be structured in a way that ensures the benefits of the combination would be delivered."
Telit added there is "no certainty" that a firm takeover offer will by made by either DBAY or u-blox.
By Zoe Wickens; zoewickens@alliancenews.com
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