Cloud-based consumer experience company Momentive Global Inc (US:MNTV) (formerly known as SurveyMonkey Inc) rocketed 17.8% higher in premarket trading on Tuesday following news of an agreement to be acquired by a consortium led by private equity firm Symphony Technology Group.
The agreement is for MNTV stock holders to receive $9.46 per share in cash, valuing the company at around $1.5 billion and at a 28% premium to the 10-day VWAP average price.
The confirmed deal may come as a sigh of relief to SurveyMonkey Momentive shareholders with the stock trading more than 70% below pandemic highs achieved in early 2021.
In late 2021, Momentive initially announced plans to be acquired by Zendesk (US:ZEN) before those were shelved. The board then decided to explore strategic alternatives which led to the private equity route.
The deal, while at a discount to the share price average over the last five years, offers investors an exit from the stock at a time when uncertainty and recession fears are dictating market movements.
Momentive’s CEO Zander Lurie explained to shareholders that Symphony’s 20 years of investment experience in the sector will provide the company with invaluable expertise as they continue to scale the customer base and product suite.
As to be expected, Chairman David Ebersman added that “The transaction is the result of an extensive and careful process to review strategic alternatives by the Momentive board. The board believes this is the right path for delivering certain and attractive value for shareholders.”
The board vote was unanimous, according to the company announcement.
The transaction will most likely be completed in the second or third quarter of 2023, contingent on regulatory and shareholder approvals.
Stifel analyst Parker Lane said that the decision to go private was not unexpected after the company first entered the agreement with Zendesk last year.
Lane added that he believes a competing bid will be unlikely given the company had already been through a competitive deal process in its recent past. Stifel maintained its hold recommendation following news of the transaction.
Fintel’s consensus target price of $10.63 suggested analysts were expecting shares to recover 37.6% through March 2024.
Research from the Fintel platform on MNTV’s options data revealed some interesting trade volumes that occurred over the last three trading days.
A significant value of net long premium volume was sold on March 10 with investors facing substantial losses in today’s trading with shares set to rise.
On the flipside, the net long premium was bought on March 9 and yesterday prior to the release indicating other investors will make a tidy profit.
This article originally appeared on Fintel
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