Bigtincan Holdings (ASX: BTH) shares are down 18% again today following yesterday’s fall. The fall in BTH shares is because that supposed takeover bid is now definitely and definitely off. Or so management says at least, unless another bidder can be pulled out of the aether. Which does lead to the thought that if private equity doesn’t want to buy an AI firm in the current frenzied excitement about AI then why would we?
We can also take this to be an object lesson in how to read a corporate announcement - as we’ve said before, always start at the end, that’s where management puts the bit they’re not keen on.
The business line itself: “Bigtincan Holdings Limited operates as a sales enablement automation company. The company’s platforms includes Bigtincan Hub, a powerful, intelligent, collaborative, and secure solution that automatically delivers relevant content to the right users directly, using their mobile devices. It offers engagement platform solutions, which combines content, communication, and interaction insights; security solutions for the secure distribution and management of documents and other media content. The company’s solutions are used for sales, marketing, and channel partners.” This is, of course, all run by AI. Or so the company says. Which might be one reason for the excitement - AI is changing so fast now, there is so much competition from the new models, that will an older version be able to keep up?
Bigtincan Holdings share price from Google Finance
Which brings us to the announcement. There’s lots of lovely stuff about how EBITDA is going to be positive, there’s excellent client retention and so on. And yet still the share price falls on the release, for: “Bigtincan refers to its various Business Update announcements since 16 January 2023 in relation to the receipt of expressions of interest regarding potential control transactions. This process of engagement has not culminated in the Independent Board Committee (“IBC”) receiving a binding proposal and accordingly, the IBC has informed those parties that the formal process has concluded.” That is, as our cynical view of corporate announcements would predict, the last major item.
What this means is that the earlier bids aren’t going to happen: “Investors in software company Bigtincan are privately hoping for a takeover offer above $1 per share after the company confirmed on Monday it has received a takeover bid from Siris Capital of 80¢ per share.” Ah, well, yes, perhaps that indicative bid should have been taken then given the 20 cents price today. It’s been mooted for some time that it wouldn’t happen. And now it definitely isn’t.
It’s possible to think of this as management and insider shareholders holding out for a bit too long for a bit too much. We tend to think that this is really about how the competitive landscape has changed this past year. And that might well mean that Bigtincan is responsibly priced at this level.
