All eyes will be on the Bravura Solutions Ltd (ASX: BVS) share price this morning after the fintech company announced that it has increased the value of its takeover offer for GBST Holdings Limited (ASX: GBT).
What has been announced?
In April Bravura Solutions made an unsolicited non-binding indicative proposal to acquire GBST via a cash or cash and scrip alternative offer of $2.50 per share.
Since then GBST has seen its share price trade above Bravura Solutions' offer following the release of a better than expected trading update. This made the odds on a deal being made at $2.50 per share very slim.
This morning Bravura Solutions advised that it has recently executed a confidentiality deed and received access to a management presentation and a follow-up Q&A session with the GBST CFO.
These materials have helped the company better understand and confirm some key assumptions underpinning the strategic rationale of a potential acquisition and the availability of potential synergies from combining the two businesses.
In light of this, the Bravura board of directors has approved and fully supports the company tabling a revised non-binding indicative proposal.
According to the release, the revised indicative proposal is for a cash payment of $2.72 per share, less the amount of any dividend paid.
This is a 49% premium to the volume-weighted average price (VWAP) from the release of GBST's half year results on February 13 to April 11, and a 5.8% premium to the last close price. Bravura is no longer proposing a cash and scrip alternative.
Pleasingly, management still expects the deal to be earnings per share accretive in the first full year of ownership (excluding any integration and transaction costs).
It also continues to believe the offer represents an attractive opportunity for the shareholders of GBST and aims to complete confirmatory due diligence and agree a transaction with the GBST board that can be jointly presented to shareholders.
GBST has advised that its board, together with its financial and legal advisers, is reviewing the new proposal and has advised shareholders to take no action at this time.
