Appen share price on watch following takeover offer

But will the offer price be a huge disappointment to investors?

| More on:
A man pulls a shocked expression with mouth wide open as he holds up his laptop.

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 Appen Ltd (ASX: APX) share price will be one to watch very closely on Wednesday.

The artificial intelligence data services provider's shares rocketed 30% higher to $1.08 on Tuesday before being thrown into a trading halt.

Appen's shares are now expected to return to trade this morning after the company responded to a price query from the Australian stock exchange.

What's going on with the Appen share price?

Investors were scrambling to buy the beaten down tech stock yesterday amid speculation that it could be a takeover target.

Appen responded to the speculation after the market close and revealed that it has indeed received a takeover proposal.

However, any investors buying shares yesterday might be disappointed to learn that the price that has been offered is notably lower than the current Appen share price.

According to the release, Appen has received a highly conditional, confidential, non-binding, indicative proposal from Innodata Inc (NASDAQ: INOD) that contemplates offer consideration of A$0.70 worth of Innodata shares per Appen share.

While this was a 100% premium to the Appen share price at the time, it is now a 35% discount to where it trades today.

What's next?

The company revealed that its board is currently seeking to understand the potential value to Appen shareholders from the proposed combination. It has agreed to a limited exchange of non-public information on both businesses to occur on a non-exclusive basis.

As things stand, it has made no determination as to whether the indicative consideration proposed by Innodata would be acceptable. It has also warned that there is no certainty that the indicative proposal will result in a binding proposal for Appen.

The Appen share price remains down 55% over the last 12 months despite yesterday's jump.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Appen. 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 Scott Phillips.

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 »