HMI Capital Management said Monday that Coupa Software (US:COUP) is worth about $95 per share it and would oppose any offer that undervalued the company.

HMI owns 4.8% of Coupa, which said on Friday that Vista Equity Partners had expressed interest in buying the company but provided no other details.

In a letter to the company on Monday, HMI wrote, “Essentially, our worry is that now is a difficult time to realize the full value of Coupa’s long-term potential as a market leader, given that Coupa’s share price is currently trading at a significantly depressed level and there are near-term sector-wide challenges in the software industry.”

HMI said it prefers to communicate with companies privately, but the situation with Coupa is urgent, as it believes management could sell the company too early and too cheaply.

“We believe the long-term future for Coupa to be as bright as ever, and on behalf of our fellow shareholders, we seek to emphasize that the board must focus on the company’s long-term value proposition in its evaluation of any strategic decisions — including a potentially opportunistic bid,” HMI wrote.

The fund noted that before news of Vista’s interest, Coupa shares traded 78% below a year ago and 88% off 2021’s high.

The shareholder urged the company to stay firm on any sale price and to push for above-market premiums off six- or twelve-month volume-weighted-average-price (“VWAPs”), which it calculated to be $60 or $86, respectively.

HMI studied two recent Vista Equity acquisitions and noted that its purchases of Avalara, Inc. and KnowBe4, Inc. were set at an average of 10.8 times next year’s revenue. Based on that analysis, Coupa is worth up to $110 a share, according to HMI.  More broadly, it said recent software sponsor take-privates had averaged 9.6 times the next 12 months’ revenue, valuing Coupa at least $95 a share.

“We believe that we are not alone, and Meritage Group’s recent 13D filing indicates that another large shareholder has potentially similar concerns,” HMI concluded.

On Dec. 2, Meritage Group L.P. converted its previous passive 13G filing into an activist 13D form, with the SEC disclosing 5.8% Coupa ownership after Bloomberg News reported that private equity firm Vista Equity Partners held discussions about a possible buyout of the company.

Following the report, Meritage said it sent Coupa its unsolicited views about any offer and the price per share that it believes would be in the best interests of all stockholders.

“However, as of the date of this filing, Meritage has received no information from Coupa or any other person regarding whether or not public media reports of a potential transaction are accurate,” the investor said.

Coupa will hold its quarterly conference call to discuss its fiscal third quarter earnings on Monday, Dec. 12, at 4:30 Eastern Time and is likely to be quizzed on the situation.

This article originally appeared on Fintel

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