Media monitoring firm Isentia gets a takeover bid at a 157 per cent premium

A takeover bid at a hefty premium is a common dream for shareholders but for Isentia (ASX:ISD) the dream is reality.

The media monitoring firm received a bid from London-listed PR software stock Access Intelligence (AIM:ACC) that is at a 157 per cent premium to its last closing price.

It closed Friday at 6.8 cents a share but the deal of 17.5 cents per share gives it an enterprise value of $67 million.

Access Intelligence has not only successfully wooed the board, it’s also got substantial holder Spheria Asset Management on-board to sell its 19.85 per cent stake.

‘An attractive transaction’

In a statement to shareholders, the board credited the attractive premium, the certainty of value as well as the synergies from the companies in light of industry conditions. The board also noted Access Intelligence’s ambitions to repay senior debt.

“Access Intelligence’s offer provides Isentia shareholders with certainty of value and the opportunity to realise their investment in full for cash,” said chairman Doug Snedden.

CEO Ed Harrison noted Access’ track record and their social media platform Pulsar that would help Isentia’s customers.

“Bringing the companies together will give Isentia’s customers access to a broader suite of products,” he said.

“For the Isentia team this represents the opportunity to be a part of a wider global organisation.”

Access Intelligence CEO Joanna Arnold also spoke about the offer.

“Access Intelligence and Isentia are aligned culturally and strategically, and customers will benefit from a product offering that gives them more choice with a broader geographical reach,” she said.

“We look forward to combining businesses and serving the Asia-Pacific market.”

An extra carrot

As if the backing of the Isentia board wasn’t enough of a carrot for shareholders to accept the offer, a trading update also made a strong case.

The company reported a drop in revenue and earnings in FY21 – coming in at $76.4 million and $12.8 million for the 11 months to May 31 2021, while equating to $93.9 million and $22.5 million in the 11 months to May 30, 2020.

Isentia blamed a cyber incident in October 2020 as well as increased industry competition and warned it wouldn’t be in as good a position if the offer was rejected. It warned it may need to raise capital to repay debt and fund working capital.

It also reminded shareholders the outcome of its ongoing legal fight before the Copyright Tribunal – arguing its interim copyright fees should be reduced – was still uncertain.

The company’s shares rose by over 150 per cent to match the offer.