Stocks of Dye & Durham (TSX:DND) jumped as much as 18 per cent on Monday (9:35AM EST), May 31, as the company announced that its management is exploring options to go private.
The software player stated through an exchange filing that a group of its major stockholders, guided by the management, has shown interest in purchasing the firm. They are offering C$ 50.50 apiece against its previous closing price of C$ 40.99 apiece to its existing shareholders. Thus, shareholders will get nearly 23 per cent in premium from Friday’s closing price.
The Toronto Stock Exchange-listed firm’s M&A process could be a bit complicated due to long securities regulations and scrutiny. This could be one of the reasons to take the firm private. Apart from that, the company expects to focus on its organic growth, but it has not mentioned its strategy in the press statement.
However, Dye & Durham’s management said that a fresh committee consisting of independent directors will also evaluate other strategic options. Hence, this is an interim proposal, that is subject to further assessments.
Let us take a glance at the software solution provider’s stock performance.
Dye & Durham Limited (TSX:DND)
The tech firm provides cloud-based software solutions to bolster effectiveness and accelerate operations for legal and business organizations. It operates throughout Canada, Ireland, the UK and Australia. Its market cap is C$ 3.28 billion.
The mid-cap stock is up 447 per cent since its listing. However, it has shrunk by nearly 19 per cent this year, offset by Monday’s performance. It has soared more than 66 per cent in the last nine months.
Bay Street analysts have pegged the stock’s target price at C$ 57.50 apiece for one-year of trading, compared to its tentatively proposed price of C$ 50.50 apiece.
Dye & Durham's Listing-to-date Price Performance Against Moving Average Multiple and Volume. (Source: Refinitiv)
As of Friday, May 28, the stock was testing its moving average multiple and marginally dropped by one per cent.
Its trading volume spiked to 259,000 shares on Monday morning, against the 30-day average movement of 172,536 shares.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.