Absolute Software holder Edenbrook says takeover price undervalues company
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Edenbrook Capital, which holds a sizeable stake in Absolute Software (NASDAQ:ABST), said the software security company's planned $11.50 as share sale to Crosspoint Capital Partners undervalues the company.
Edenbrook, which has a 10.4% stake in Absolute Software, said the company would be valued much higher if it to were remain as a standalone, according to a letter to the company's board on Thursday, highlighting that the average price target of five analysts who cover the stock was $14.78, prior to the acquisition announcement last Thursday. The fund also said the deal price "is not even in the ballpark of private market value."
"Persistence and Resilience are the names of two of Absolute’s core product offerings," Jonathan Brolin, founder and managing partner of Edenbrook wrote in the letter. "It would have been nice if the board had shown more of both in order to maximize shareholder value. Perhaps another enterprising buyer, realizing how cheaply the board is willing to sell the company, will come along and bid a higher price. Shame on you if you don’t let them."
The Absolute Software (ABST) sale came about three months after the company's shares plunged 17% on Feb. 14 in the wake of its Q4 results and conference call, which Edenbrook described as the "Valentine's Day Massacre."