Optiva's largest shareholder ESW has made a public offer to increase its stake in the company. The company said it opposes Optiva's recent decision to issue new debt following pressure from other activist investors. Optiva cautioned shareholders against the ESW offer, noting it does not expect to acquire a majority of shares. The company proposed a new shareholders rights plan that could in future block any hostile takeover attempts.
ESW earlier went to Optiva in June with a takeover offer. The company said its committee of independent directors set up to evaluate ESW's intentions did not receive a response to their request for further information. ESW said Optiva ignored its request to commission an independent valuation of its offer.
The latest bid for the company offers a 122 percent premium on Optiva's 20-day average share price, at CAD 60 per share. This values the entire company at CAD 379 million. However, ESW noted that it is unlikely to acquire a majority of the shares, due to opposition from the investors Maple Rock Capital Partners and EdgePoint Investment. It's seeking an exemption from the securities regulator to the requirement that at least 50 percent of shares be acquired in a tender offer for a company. The launch of its offer is conditional on receiving that exemption.
Amid the conflict among shareholders, Optiva proposed a new rights plan. One right will be assigned to each share held. The rights become exercisable in the event that any person or group becomes a beneficial holder of 30 percent or more of the shares without complying with the 'Permitted Bid' provisions under the rights plan. In such event, holders of the rights other than the acquiring party will be permitted to exercise their rights to purchase additional shares at a 50 percent discount to the then prevailing market price, hence creating a block against the hostile takeover.
The rights plan will be subject to a vote at the annual meeting on 18 August.
