SMS Management & Technology’s shareholders will have to wait a little longer before making up their minds on their preferred suitor, with the ASX-listed IT services provider’s board managing to postpone the impending vote on a $124 million offer put on the table by Melbourne-based suitor DWS.
The takeover target has been successful in getting a court order to defer the scheme meeting, originally scheduled for June 14, with DWS now facing stiff competition from fellow IT services provider ASG Group.
DWS has offered SMS shareholders $1 in cash and 0.39 shares under the offer lodged in February. ASG threw a last minute spanner in the works in May with a competing indicative and conditional offer for SMS, and the company has reinforced its commitment to a deal prompting the target’s management to push back this week’s shareholder meeting.
Perth-based ASG has lobbed a $1.80 a share all cash offer for SMS and the company’s co-founder and chief executive Geoff Lewis said that SMS shareholders now had some options on front of them.
“Our offer carries the eternal virtue of being all-cash,” he said.
“It offers SMS shareholders a healthy premium over the alternative, which also carries intrinsic risks and uncertainties because it offers DWS shares as part consideration.”
“SMS shareholders know precisely what they are getting and don’t have to run the risks in holding DWS shares,” Mr Lewis added.
With the meeting deferred SMS’s board said it will now look to engage with ASG but warned that there was no certainty that an offer for SMS from ASG will eventuate.
The latest development puts pressure on DWS, which will have to decide if it’s willing to go toe to toe with ASG, which is backed up by the firepower of its Japanese owner Nomura Research Institute.
Nomura bought ASG for $349m last September and with the acquisition now bedded down, the Japanese technology consulting group is looking to use ASG as a platform to target the Australian market.
The SMS acquisition fits that agenda well and Mr Lewis said he and his team was keen to get the ball rolling on a possible transaction.
“We are pleased SMS has obtained a court order deferring the meeting scheduled for tomorrow to consider the alternative proposal, and we look forward to working with the SMS Board to getting our Offer before SMS shareholders as quickly as possible,” he said.
A new meeting date for SMS shareholders to vote on the DWS scheme is yet to be set.
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