Telit Communications succumbs to DBAY
The board of Telit Communications PLC (LON:TCM) has been worn down by DBAY and is recommending acceptance of 220p a share takeover.
The bid by funds managed by DBAY values the Internet of Things enabler at around £307mln. Shares in the technology company currently trade at 225p, up 11.4% on the day.
The Telit board has recommended acceptance of the offer even though, according to DBAY’s statement, the Telit directors consider the cash offer “undervalues Telit and its longer-term prospects”.
DBAY, the largest shareholder in Telit with around 26.02% of the current issued share capital, confirmed press speculation on March 18 that it was in discussions with Telit’s management about a possible offer; this was after the private equity firm said in December of last year it had no intention of making an offer for Telit, having previously tabled indicative bids of 175p (in October) and 190p (in December).
Swiss computing firm u-blox was also in the frame at that time with a possible all-share offer worth, at the time, close to 250p per share.
“Telit has transformed in recent years and is now a business built on strong financial, operational and governance foundations. Whilst we believe that Telit is well-positioned to capitalise on growth opportunities in its markets, the cash offer represents an opportunity for shareholders wanting to realise their investment in cash to do so at a material premium to the historical share price of Telit,” said Simon Duffy, the chairman of Telit.
Telit would rank fairly highly on the list of companies that needed to transform. In August 2017 its then chief executive officer, the splendidly named Oozi Cats, resigned after an internal company investigation determined he had covered up a US indictment against him for alleged fraudulent activity.
The US authorities had warrants against Cats, under the name Uzi Katz, dating back to 1992, for allegedly setting up a fraudulent “land flip” property scam.
At the time, the Telit board said it was “a source of considerable anger to the board” that the historical indictment against Oozi Cats was never disclosed to them.
The company was subsequently fined £350,000 by the London Stock Exchange but the fine was waived after it was concluded that the board had been misled by Cats.
The Financial Conduct Authority (FCA) conducted an investigation into Telit in June 2020 over the timeliness of its financial reporting and decided not to take enforcement action.
The company put the embarrassing incidents behind, cleaned house in the board room and knuckled down to exploit its semiconductor technology to rise the wave of the Internet of Things.