Isentia’s share price rocketed 140%, or 9.6 cents, to 16.5 cents on news of a takeover offer for the Australian-grown media monitoring business.
UK-based marketing technology company Access Intelligence Plc is offering 17.5 cents a share, a premium of 157% to the previous closing price of 6.8 cents.
The deal implies a value of $67 million placed on the company -- $35 million equity value and $32 million net debt.
The subsequent share price rise looks like a cliff rising from the ocean bottom:
But in reality it has been a long slide since November 2015 when the shares peaked at $4.95.
In 2015 the company looked like hitting a market capitalisation of $1 billion.
In August that year the then CEO John Croll announced full year revenue of $127.3 million, 2% ahead of prospectus and growth of 15%. Organic growth was a healthy 11%.
Shareholders had more than doubled their money after Isentia had listed for $2.04 a share in 2014.
But the share price was down to $1.09 when John Croll (who has since founded competitor Truescope) resigned in February 2018. Since then it’s been a long drop to around 7 cents, just before the takeover offer.
And the business has been shrinking, partly due to increased competition from new players including the 100% Australian real time monitoring group Streem, plus technical difficulties and a poor investment in content marketing.
In the 11 months to the end of May, Isentia had revenue of $76.4 million, down 18.7% on the same period last year. In the previous year to June 2020, Isentia reported revenue of $110.3 million, down $12.2 million.
Without the takeover offer, Isentia would have to raise more capital to deal with net debt of $30.3 million at the end of December.
In a trading update, the company lays out the consequences of the takeover not going ahead: “It is likely that Isentia will need to raise equity capital to repay debt and fund working capital and ongoing investment in the business.”
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