Bravura Solutions Ltd [ASX:BVS] shares have risen by 6.40% today, following the news of their takeover by GBST Holdings Ltd [ASX:GBT]. Seemingly after a weekend to consider the decision, investors were attracted by the decision to absorb 100% of the IT service management company, making it one of the best performers on the ASX today.
This is an exciting move for the software company, which is a well-known supplier of superannuation, pension, life insurance, private wealth and investment.
At time of writing, Bravura’s share price sits at $5.73 apiece.
Details on the GBST acquisition
GBST has had a difficult few years, as they struggled to acquire clients across a number of their platforms. But with an offer from a strong company like Bravura, this brings positive opportunity.
On Friday last week, GBST announced an unsolicited, non-binding indicative proposal that would allow them to acquire the entirety of the ordinary shares of the IT company. It was detailed that this would occur via a cash or cash and scrip alternative offer of $2.50 per share.
This news saw GBST’s share price shoot up to a 21% increase.
However, it was also detailed that the agreement is highly conditional — being that relevant approvals are required, it is completed in due diligence to the satisfaction of Bravura, and that a Scheme Implementation Agreement is completed on acceptable terms. Not surprising, an eight-week window before closing has been requested, as it is likely GBST would be hanging out for a better offer to come along after the initial announcement.
The takeover should ease the burdens of GBST while they upgrade a number of their platforms and save costs elsewhere in the business. It should allow them to revaluate the next steps for the business to take.
On the same day as the announcement, Bravura revealed they would no longer be a substantial holder of National Australia Bank Ltd [ASX:NAB]. Since Thursday, their share price has increased by 11%.
What this means for investors
This is certainly an exciting time for both parties. Even when the takeover is decided, GBST will still remain focused on the technology they will be providing for the major brands across the world. Therefore, this decision will give them the wiggle room they possibly need to be creative to keep pushing forward in innovation.
Though for investors, this could be a great time to jump into the Bravura stock before more good news starts to come. In the last few months, we have seen a great boost to what had been a fairly volatile few months for the company. Unless the deal falls through, one could only expect these increases to continue.
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