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Highlights
- Xref shares plunge 26% to 11.5 cents following failed takeover.
- The planned $40 million acquisition by Seek has been scrapped.
- The deal had received board approval but ultimately fell through due to lack of full support.
Investors in human resources technology firm Xref Ltd (ASX:XF1) faced a brutal trading session on Tuesday as shares tumbled 26% to 11.5 cents. The sharp decline followed news that job listings giant Seek Ltd (ASX:SEK) had abandoned its planned $40 million takeover of the small-cap company.
The failed deal, which was announced in November 2024, had been expected to go through smoothly. Xref’s board had unanimously recommended that shareholders approve the transaction, pending an independent expert’s assessment. However, despite these endorsements, the acquisition ultimately collapsed, leaving investors scrambling to offload shares.
A Deal That Looked Certain—Until It Wasn’t
Seek’s acquisition of Xref appeared to be a done deal after financial advisory firm BDO Corporate Finance Australia assessed Xref’s valuation at between 12.9 cents and 21.4 cents per share. Seek’s offer fell within this range, and the Xref board publicly backed the transaction, with directors planning to vote in favor of the deal.
However, not everyone shared the board’s enthusiasm. It seems that resistance from key shareholders or regulatory concerns may have played a role in the deal’s demise, though details remain unclear. The breakdown of negotiations has left Xref in a vulnerable position, as the company now faces market uncertainty without the expected capital infusion from the acquisition.
What’s Next for Xref?
The dramatic share price drop reflects investor disappointment and uncertainty about Xref’s future. With the Seek deal now off the table, Xref will need to refocus on its standalone growth strategy or potentially seek another suitor willing to acquire the company.
