One-time retail investor favourite Telit Communications (TCM:AIM) has lifted the ‘put-up-or-shut-up’ restriction on DBAY Advisors, sparking speculation that the company could finally secure the takeover it has been seeking for months.
Telit designs and manufactures a range of machine-to-machine connectivity hardware used in various internet of things applications.
The Israeli and AIM-listed company will now allow DBAY to begin ‘limited confirmatory due diligence’ after showing interest in upping its stake in the business. It currently owns 26% of Telit’s share capital, and topping the 29.99% threshold would require the private equity investor to make an offer for the entire company.
SIDE-STEPPING TAKEOVER RULES
DBAY previously showed interest in buying Telit last year but walked away from talks in December 2020. Under normal UK takeover rules DBAY wouldn’t be allowed to come sniffing around again for six months to avoid destabilising the business for a prolonged period.
‘It seems both parties have had a change of heart,’ said Megabuyte analyst Indraneel Arampatta, after DBAY showed interest in upping its stake at yesterday’s closing price of 207p.
ALTTERNATIVE BUYERS
‘We wonder if any of the other interested parties want to return to the table,’ said Arampatta, although he admits that such an outcome is ‘unlikely’.
Swiss microchip supplier u-blox was the most recent company to show an interest but it decided against making an offer for Telit on 18 January 2021.
Telit stock nudged 2% higher on 18 March to 212p, the highest it has been since founder and former boss Oozi Cats left the business in 2017 after being caught up in a fraud investigation in the US that was unrelated to Telit.
