Hansen (ASX:HSN) share price sinks 13% after withdrawn acquisition proposal

The offer is off the table and here are the details…

| More on:
A child in full business suit holds a falling, zigzagged red arrow pointing downwards while sitting at a desk that holds cash and an old-fashioned adding machine with paper spooling.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Hansen Technologies Ltd (ASX: HSN) share price is taking a dive to the downside today.

This follows news that private equity firm BGH Capital has withdrawn its previous acquisition proposal for the billing technology company.

In early morning trade, the Hansen share price is trading 13.13% lower to $5.36.

Why is the Hansen share price on the move today?

Investors have decided to jump the Hansen ship on Monday morning after the company notified shareholders that its previous acquisition proposal from BGH Capital has been withdrawn.

According to the release, BGH Capital has informed Hansen that it has decided to withdraw its unsolicited proposal to acquire the billing company. As a result, all discussions pertaining to the proposal have ceased.

This decision has followed the conclusion of BGH's extensive due diligence. Interestingly, the private equity firm did not specify any specific details as to why it has withdrawn from the proposal.

In fact, BGH appeared to remain positive on the company. The release stated, "BGH Capital has advised the company that it continues to see Hansen as a highly effective organisation with an outstanding management team and strong prospects."

Additionally, BGH reported no issues that Hansen considers material in its current operations and strategy.

Despite this news, it looks as though investors are concerned about the latest announcement, sending the Hansen share price lower. There seems to be a lingering worry: why has the offer been withdrawn if there isn't a material issue?

Furthermore, Hansen Chairman David Trude responded to the news, stating:

The Hansen business continues to go from strength to strength. We were particularly pleased with the strategic customer wins during the year including Telefonica, DISH, Western Power and Nautilus Solar. Significant new business wins, coupled with a continued focus on our aggregation strategy, reinforce our commitment to, and confidence in, our long-term revenue target of $500 million in FY25.

Original acquisition proposal

Originally, BGH Capital put forward a conditional non-binding proposal for 100% of Hansen at a price of $6.50 cash per share. This offer was made on 7 June 2021 which sent the Hansen share price skyrocketing by 22%.

At the time, all the directors of Hansen intended to unanimously recommend the proposal except for CEO Andrew Hansen. For reference, Mr Hansen holds ~17.5% of the Hansen shares on issue, amounting to approximately $216.3 million in value.

Finally, based on the Hansen share price, the company commands a $1.2 billion market capitalisation.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Hansen Technologies. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

Man holding a calculator with Australian dollar notes, symbolising dividends.
Technology Shares

$10,000 invested in DroneShield shares 5 years ago is now worth…

You might be laughing all the way to the bank if you had done this.

Read more »

Happy woman working on a laptop.
Technology Shares

Up 60% since April, why this $40 billion ASX 200 tech stock remains a 'compelling buy' today

A leading expert believes this $40 billion ASX 200 tech stock has a lengthy growth runway ahead of it yet.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Technology Shares

DroneShield shares sink 7% despite big news

Let's see what's going on with this market darling on Thursday.

Read more »

A man activates an arrow shooting up into a cloud sign on his iPad.
Technology Shares

Up 25% since April, is it too late to buy Xero shares today?

A leading expert gives his verdict on the growth outlook for Xero shares.

Read more »

Man looking at digital holograms of graphs, charts, and data.
Technology Shares

2 amazing ASX tech shares I wish I'd bought last year

These tech companies are among the world’s best companies.

Read more »

A man in a business suit and tie places three wooden blocks with the numbers 1, 2, and 3 on them on top of each other.
Broker Notes

3 reasons to buy this booming ASX All Ords tech stock today

A leading broker forecasts more gains to come from this surging ASX All Ords tech stock.

Read more »

Man ponders a receipt as he looks at his laptop.
Technology Shares

Brokers rerate 3 leading ASX 200 tech stocks

Experts reveal their ratings on the ASX 200 tech sector's three biggest companies.

Read more »

Hologram of a man next to a human robot, symbolising artificial intelligence.
AI Stocks

Why Macquarie forecasts a big rebound for these 2 quality ASX All Ords tech stocks

Macquarie expects a big rebound is coming for these AI linked, ASX All Ords tech stocks.

Read more »