Mitek stock price rises after ASG beefs up acquisition offer
ASG Technologies, the Florida-based software company backed by activist hedge fund Elliott Management, has upped its offer for San Diego’s Mitek Systems to $11.50 per share from $10 apiece, reports Sarah de Crescenzo for Xconomy (FinTech Futures’ sister publication).
It took issue with “opportunistic” nature of a proposal last month
That’s according to a letter ASG made public this week.
The stock price of Mitek rose nearly 9% on the news, closing at $9.75. The company’s bread and butter has been licensing software for remote document capture, such as bank cheques, but it is also developing a new business in digital identification verification.
“ASG released the private correspondence because despite the increased offer, Mitek has maintained its refusal to engage with ASG on reasonable terms that would allow ASG to conduct the necessary diligence and make a binding offer,” ASG said in a prepared statement.
It’s the latest in a series of letters to Mitek’s board of directors that ASG and Elliott have published to pressure the company into accepting the takeover bid.
ASG CEO Charles Sansbury, in an 31 October missive, “reaffirmed” the company’s $10 per share offer. Sansbury said the money – about $380 million – would come from ASG’s balance sheet, Elliott, and “our other shareholders”.
Mitek, in a 5 November response, rejected the offer, asserting that it undervalued the company. It also took issue with the “opportunistic” nature of the proposal – ASG noted in the offer that Mitek had recently announced its CEO and CFO were leaving – and the risky nature of such a proposal without financing commitments.
Since then Mitek has hired a new CEO, Max Carnecchia. Its CFO, Jeff Davison, recently rescinded his resignation.
And ASG, in the offer made public this week, said the proposal wouldn’t be subject to securing third-party financing thanks to its backer, New York-based Elliott, which manages $35 billion.
