Media speculations support the chattering of the preliminary merger proposals received by Telet Communications (AIM: TCM) from Swiss Semi-Conductor maker U-Blox (SWX:UBXN).
Under the terms of the proposal, Telit Communications shareholders will receive U-Blox shares at a value of £2.50 per Telit share. This would result in shareholders holding approximately 53% of the total company, based on the assumptions of the proposal.
Territt said its board is considering the merger proposal along with financial advisor Rothschild & Co, and further announcements will be made as further developments emerge.
The company added that the proposal assumes that such a merger would be constituted as a Territ offer by U-Blox, but there is “no certainty” that the proposal or similar would be accepted. That statement has been added:
“As per Rule 2.6(a) of the Code, until 5pm on December 18, 2020, U-Blox is required to announce its solid intention to make an offer to the company pursuant to Rule 2.7 of the Code, or to announce that it is not intended to make an offer to the company.
“This deadline may be extended with the consent of the Panel on acquisitions and mergers in accordance with Rule 2.6(c) of the Code.”
Following the announcement, Telit Communications shares were 17.95%, surged to 198.40p on Friday, November 20, 2019. The price is the highest since 2017, peaking at a share of around 371.00pa, but its six-month high is ahead of 106.00p.
Conversely, U-Blox’s stock fell 8.17% to 53.65 CHF, but still outperformed the Nadir from the start of the year seen around Halloween at 45.12 CHF.
