Home / News / Is it time to sell Altium?

Is it time to sell Altium?


The Altium Limited (ASX: ALU) share price is going bananas right now after revealing a takeover offer from US software group Autodesk (NASDAQ: ADSK).

  • Why is the Altium share price going nuts?

    The electronic PCB software business revealed that it has received a formal, non-binding, indicative and unsolicited takeover proposal from Autodesk. My colleague Lachlan Buur-Jensen was right when he speculated that it could be Autodesk.

    Autodesk’s offer for Altium is $38.50 per share.

    If you haven’t heard of Autodesk before, it’s a global software business that makes software products and services for the architecture, engineering, construction, manufacturing, media, education and entertainment industries. It has a market cap of US$62 billion.

    What was the responce?

    The Altium board said it appreciated the interest, which has evolved from talking about a strategic partnership, but believes the offer significantly undervalues Altium’s prospects and therefore the board rejects the proposal at the current price.

    Altium said that it has a unique position in the electronics ecosystem and in the past unsolicited acquisition interest has developed from partnership dialogues with others in the ecosystem. The board said it would engage with interested parties about an appropriate valuation and will continue to review all potential strategic alternatives for the company.

    Why so confident?

    An offer that was so much higher than the last share price shouldn’t be easily dismissed. But Altium seems confident about the future.

    The board said that it has a strong track record of setting ambitious long-term goals and achieving them, which gives the Altium board confidence in the company’s ability to pursue its transformative strategy for the electronics industry and to achieve its 2025 financial goals. Having pivoted to the cloud, Altium said it’s now well-positioned to pursue market dominance and industry transformation. It’s turning into a software as a service (SaaS) business.

    Summary thoughts on Altium and the share price

    Altium is a very high-quality business. It’d be a shame for the ASX to lose its presence because it has a very promising future. I’m not sure how much higher the Autodesk offer would have to be before Altium would consider an offer. I’d guess at least in the $40s.

    As an Altium shareholder, this offer is very welcome as it has boosted the Altium share price significantly. But, I’m going to hold on – there could be a higher bid coming. It speaks volumes of management’s confidence for the long-term.

    Information warning: The information on this website was published by The Rask Group Pty Ltd (ABN: 36 622 810 995) and is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

    Print Article

    ASIC levy review targets adviser ‘time-lag’ issue

    The review will consider “the consequences of time lags between regulatory action and cost allocation”, the terms of reference states.

    Tahn Sharpe | 10th Aug 2022 | More
    August reporting season has profit margins and managing expectations in focus

    An action-packed month of record dividends, soaring energy prices and rising inflation are all expected to be key trends this earnings season.

    Ishan Dan | 10th Aug 2022 | More
    ‘Volatility provides opportunities for income investors: Franklin Templeton

    Following two years of volatility, triggered by a global pandemic, supply-chain disruptions and the release of massive stimulus that followed, the financial system is in uncharted territory. Inflation is at highs not seen in four decades; bonds have fallen with equities, invalidating the traditional 60/40 portfolio; and, to add a spanner in the works, a…

    Ishan Dan | 5th Aug 2022 | More
    Is The Lottery Corp (ASX: TLC) the best ASX dividend share?
    Lachlan Buur-Jensen | 3rd Jun 2022 | More
    Australian housing set to tank like New Zealand
    Ishan Dan | 13th Jul 2022 | More
    Which stocks made the cut for the “recession-proof” portfolio?
    Ishan Dan | 1st Jul 2022 | More
    Your guide to the ANZ, Suncorp deal and capital raising
    Lachlan Buur-Jensen | 22nd Jul 2022 | More
    What will the corporate dividends look like in 2022-23?
    Ishan Dan | 13th Jul 2022 | More