The Nearmap Ltd (ASX: NEA) share price has taken a big step closer to leaving the ASX as its board unanimously backed last week's takeover offer from Thoma Bravo.
The board's decision comes after the bidder undertook its seven-day due diligence where both parties entered into a scheme implementation deed.
Shares in the aerial mapping ASX tech company jumped 4.8% to $2.06 in early trade. But the Nearmap share price stayed under the $2.10 offer price as hopes of a competing bid faded.
Image source: Getty Images
Why Nearmap's board is backing the takeover
Nearmap's board agreed to the scheme of arrangement after it engaged in a "robust" review process with its financial and legal advisors.
It has urged shareholders to vote in favour of the scheme in the absence of a better offer. The Nearmap board believes this is an attractive offer as it is at a premium to where the Nearmap share price was trading recently.
The board also pointed out that the all-cash takeover gave certainty of value to shareholders. The limited set of conditions attached to the deal was also a deciding factor.
Takeover conditions
The scheme contains several standard conditions. This includes an independent expert issuing a report that finds the takeover to be in the best interests of shareholders.
The transaction must also be approved by Australia's Foreign Investment Review Board and has to be cleared in the United States.
There are also certain circumstances whereby either the bidder or target has to pay the other a break fee of up to $10.5 million.
Naturally, Nearmap's shareholders will have to vote in favour of the scheme, and the local court give its blessing, for the deal to go ahead.
What did the directors say?
Nearmap chairman Peter James commented on the takeover bid, saying:
Nearmap has achieved considerable success to date in Australia and North America and while, in the long-term, there remains potential future growth trajectory, this has to be balanced with the business and market risks that Nearmap shareholders face remaining as a publicly listed independent company.
In considering the merits of the Thoma Bravo proposal, the Directors have at all times been guided by our overarching responsibility to consider the interests of Nearmap and all of its shareholders. It is our view that the Thoma Bravo Scheme will realise attractive and certain value for shareholders in current markets.
Next steps
A scheme booklet containing details of Nearmap's takeover and an independent expert's report will be sent to shareholders in October 2022.
The shareholder meeting to vote on the scheme is expected to be held the month after.
If everything goes to plan, the scheme is expected to be implemented by late November.
