Pushpay (ASX: PPH) shares surge 15% on improved takeover offer

Highlight:

• Pushpay shares defied market weakness and surged higher on Thursday.
• An improved takeover offer from Pegasus led to buying in PPH shares.
• Including today's gains, PPH shares have appreciated over 27% in a year.

After a decent pullback on Wednesday, the S&P/ASX200 index slipped deep into the red on Thursday, tracking developments in the global market. As of 3:05 pm AEDT, the ASX benchmark was down 1.69% to trade below the 7,000 mark at 6,949.70. The information technology sub-sector in the ASX 200 was down 1.66% at the same time. However, some tech shares managed to defy the weakness in the market and were trading higher. One such tech stock is donor management system provider Pushpay Holdings Limited (ASX: PPH), which was up nearly 15% at AU$1.297 after touching an intraday high of AU$1.302.

So, what is driving PPH shares higher?

Pegasus BidCo Limited, which had submitted a bid to acquire 100% shares of Pushpay, has come up with a revised offer that is 6% higher than the previous offer. The earlier offer by Pegasus was rejected by shareholders at a scheme meeting earlier this month.

Pegasus has now offered to pay NZ$1.42 in cash per share as compared to NZ$1.34 per share earlier. The revised offer values the company at NZ$1.66 billion.

Will this deal go through this time?

This time Pegasus has received commitments from some of the large investors of Pushpay, such as ANZ New Zealand Investments, Accident Compensation Corporation, Fisher Funds, Nikko Asset Management, to name a few, to vote in favour of the revised offer. On top of this, another large investor, Mint Asset Management, has also said it will vote in favour of the scheme, Pushpay said in an ASX filing. These large shareholders have a combined shareholding of 18.6% in Pushpay.

Besides this, some specified shareholders, who hold 10.3% of Pushpay's issued shares, have given commitments to support the new scheme.

Pushpay recommends shareholders vote in favour of the scheme

Non-conflicted directors of Pushpay have unanimously recommended shareholders vote in favour of the scheme in the absence of any other superior proposal.

Implementation of the scheme is subject to the approval of Pushpay shareholders, the New Zealand High Court and is subject to other customary conditions.

Including today's gains, PPH shares have appreciated over 27% in a year and are just 4% away from their 52-week high of AU$1.340 registered on 26 May 2022.