SMS bidding war comes to an end
- 20 June, 2017 08:52
The bidding war between DWS (ASX:DWS) and ASG Group to acquire SMS Management & Technology (ASX:SMX) appears to have come to an end, with DWS bowing out of the race.
DWS told shareholders on 19 June that it would not make a counter-bid to ASG’s $124 million cash offer for the company, leaving the Nomura Research Institute (NRI)-owned IT services company the last buyer standing in the race to acquire SMS.
“The board of DWS believes DWS is well positioned in its target markets and will continue to assess value-accretive growth opportunities that align with its broader strategy,” the company said in a statement.
DWS’ move to drop its acquisition action comes just days after ASG Group made a binding offer for SMS.
The bid, which was received by SMS late on 13 June, meant that the company had to choose between the ASG offer, and the binding $124 million bid made by DWS earlier in the year.
The 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.
This option has now been put to rest.
DWS entered into a scheme implementation agreement in February to acquire SMS Management & Technology.
However, the Western Australian IT services company was effectively blindsided by ASG Group, which swooped in three months later with its expression of interest (EOI) on making a bid for the company.
SMS told shareholders in late May that its board believed that the proposed acquisition by DWS by scheme of arrangement was still in the best interests of SMS shareholders, regardless of ASG’s approach.
ASG’s official offer for the company subsequently saw SMS change its tune, deciding that ASG presented the superior offer.
For DWS chief executive, Danny Wallis, the approach by ASG Group and, more importantly, SMS’s move to court the company’s bid, came 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.