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Telit Communications in talks with u-blox Holding AG and Dbay about possible offers

The board said discussions with both parties are continuing “with a view to ensuring that any possible transaction with either party would be in the best interests of all shareholders, whether large or small”

Telit Communications PLC -

Telit Communications PLC (LON:TCM) has confirmed it is in talks with both Swiss computing firm u-blox and private equity firm Dbay about possible offers.

Last Friday Dbay, which owns around 15.4% of the AIM-listed internet of things specialist, upped its possible cash offer to 190p per Telit share from a previous bid of 175p made in October.

Later on Friday, Dbay bought 471,516 Telit shares, where the highest price paid was 194.8p, which means under the London Stock Exchange’s takeover code any possible offer from Dbay will need to be at or above that price.

Telit said in a statement today that even this higher price would “fundamentally undervalue” the company, as its recent trading update revealed its “resilience despite continued lockdown measures across the company's markets and the impact of the pandemic on customer spending”.

“This resilience, allied with the Board's belief that the equity markets have not yet embedded the fundamental governance, strategic, operating and financial changes in Telit since the events of 2017, informs the board's view that Telit remains undervalued,” it added.

As regards the proposal for an all-share merger with u-blox, which was pitched last month at a price that was near 250p per share, the London-based company said its board “believes that the industrial logic in a combination with u-blox could create value for shareholders of both companies” but “any combination would need to be on terms that reflect Telit's financial performance and position and be structured in a way that ensures the benefits of the combination would be delivered”.

It said commercial discussions with both u-blox and Dbay are continuing “with a view to ensuring that any possible transaction with either party would be in the best interests of all shareholders, whether large or small”.

Quick facts: Telit Communications PLC

Price: 189.4 GBX

AIM:TCM
Market: AIM
Market Cap: £254.53 m
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