DWS (ASX:DWS) is working out whether it wants to raise the stakes in its bidding war against ASG Group for fellow IT services provider, SMS Management & Technology (ASX:SMX).
The Perth-based IT services company, which is publicly listed on the Australian Securities Exchange (ASX), told shareholders late on 14 June that was considering its options, which could include a counter proposal for SMS.
The move comes after SMS told investors that the binding acquisition bid it received from ASG Group on 13 June, worth around $124 million, represented a “superior” proposal, positioning the Nomura Research Institute-owned IT services player as the front runner in the escalating bidding war.
According to SMS, the ASG offer represents a 12.2 per cent premium to the implied value of consideration under the DWS offer agreement it entered into in February – based on the mid-point of the independent expert’s valuation of DWS shares.
The DWS offer is also slated to be worth around $124 million.
ASG has undertaken to not withdraw its offer until 21 June, giving DWS at least a few days to work out its next step.
For DWS chief executive, Danny Wallis, the approach by ASG Group and, more importantly, SMS’s move to court the company’s bid, has come as a disappointing blow.
"It's disappointing that Australians don't support keeping business in Australia. Australian shareholders had the chance to vote to support profits staying in Australia and supporting Australian superannuation funds, but now it could go to the Japanese," Wallis told Fairfax Media.
"We're especially disappointed given the amount of time and money we've put into this,” he said.
DWS entered into a scheme implementation agreement to acquire SMS in late February, before ASG group swooped in three months later with its expression of interest (EOI) on making a bid for the company.