The Symbio Holdings Ltd (ASX: SYM) share price is rocketing higher on Monday.
In morning trade, the ASX tech share is up 17% to $3.09.
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Why is this ASX tech share racing higher?
Investors have been scrambling to buy the cloud-based communication company's shares this morning after a bidding war broke out.
As some readers may be aware, Superloop Ltd (ASX: SLC) has been undertaking due diligence and recently tabled a best and final non-binding offer of $2.85 per share in cash and scrip. This increases to $3 if you include potential franking credits that could be released before closing.
After the market close on Friday, it was revealed that Aussie Broadband Ltd (ASX: ABB) has entered the fray with a non-binding offer of $3.15 per share in cash and scrip. Once again, if franking credits are released, the offer will increase in value to $3.30 per share.
This represents a 10% premium to Superloop's offer and is 25% higher than where the ASX tech share ended last week.
According to the release, Aussie Broadband's default consideration comprises $2.36 in cash and 0.192 Aussie Broadband shares for each Symbio share. This represents 75% cash and 25% scrip. However, Symbio shareholders will be able to choose to maximise either cash or ABB scrip, subject to a scale back as appropriate.
What now?
The Symbio board has undertaken a review of Aussie Broadband's proposal. Given its premium to the Superloop offer, the board considers it to be a superior proposal.
As a result, it has entered into the exclusivity and process deed to enable Aussie Broadband to undertake a period of exclusive due diligence for 15 business days.
It has also confirmed its intention to recommend the Aussie Broadband proposal, subject to entry into a scheme implementation deed, the findings of the independent expert, and in the absence of a superior proposal.
Though, that doesn't necessarily mean the end of Superloop. While Superloop called its latest proposal its best and final offer, it came with the disclaimer that it was "best and final in the absence of a superior proposal."
Symbio revealed that it has continued to engage with Superloop.
