(Reuters) – Australia’s Bigtincan Holdings Ltd said on Thursday top shareholder and suitor SQN Investors (SQN) had expressed its disagreement over a potential capital raising, calling it “highly dilutive” and “value-destructive”.
Last week, the software provider received a buyout bid from private equity adviser SQN, valuing it at A$441.9 million ($296.74 million). Bigtincan, however, did not immediately back the bid in view of talks with other interested parties.
“We urge you to not pursue any capital raise or do any acquisitions at this time,” SQN said in its letter to Bigtincan, referring to a media report that the Sydney-based company’s shares were on a trading halt pending a A$30 million placement.
“We would urge you to instead honour your fiduciary obligations and engage with the various parties that have approached you about a control transaction, including SQN Investors.”
SQN, which holds a 13.6% stake in Bigtincan, also expressed concerns the potential capital raise “would imply a reliance on further acquisitions” to achieve fiscal 2023 annualised recurring revenue guidance of between A$137 million and A$143 million.
In its response to the letter, Bigtincan confirmed its guidance and said it would make an announcement once the placement was completed.
($1 = 1.4908 Australian dollars)
(Reporting by Roushni Nair in Bengaluru; Editing by Christian Schmollinger and Subhranshu Sahu)