Telit Communications has called off all takeover negotiations with U-blox, saying the proposed all-stock merger does not create enough value for shareholders going forward. “Given that the group is confident in its prospects, is well capitalized, and has a strong position in a growing market segment, the board remains confident it can deliver growth in shareholder value as an independent entity,” the company said.
U-blox was scheduled to make a final offer by 18 January. Telit said further discussions and uncertainty were not in the best interest of the company or its stakeholders.
Telit received an all-stock bid from the Swiss company in November under which Telit would take about 53 percent of the combined company. The company earlier rejected a takeover offer from Lantronix, a producer of IoT products and services, and had also received a preliminary approach from asset manager DBAY Advisors.
The company said it would provide a fuller update on its financial performance by 21 January, ahead of its final results in April. Telit said it was able to fully maintain its strategic and operations plans despite the coronavirus pandemic, with no need for further action.
U-blox still interested
U-blox confirmed it received the letter from Telit terminating discussion but said it still believes in the "strong rationale" behind the combination, which could result in "substantial" synergies to the benefit of both sets of shareholders. U-blox talked about the possibility of a combined product offering and scale benefits in areas such as innovation, sales and global distribution channels.
The company said it remained open to discussions with the board of Telit.
