Altium (ALU) shares rally with takeover play
ALU +39.03%: Our most recent purchase in the MM Flagship Growth Portfolio Altium (ALU) received a takeover approach over the weekend from Nasdaq Listed Autodesk at $38.50 a share which was a ~40% premium to last and a ~43% premium to our entry price of $26.97 about 2 weeks ago. ALU was also the subject of our 2nd Episode in our 6 part podcast series – Direct From the Desk – click here to listen to the episode.
While we viewed the stock as undervalued when we bought it, obviously today’s rally is a significant one and has us pondering the potential outcomes from here. For now we’ll hold given that ALU and Autodesk have been in discussions for months, and ALU was very quick to rebuff the bid which implies that ALU themselves are confident of more. That also holds more weight given the ALU CEO is the 3rd largest shareholder and management have decent skin in the game. Autodesk is a natural acquirer having made 150 acquisitions in various tech companies over the past decade. Not often does the first price get the job done. Autodesk is capped at ~$A80b and is one of the worlds largest CAD/CAM software companies. The bid values ALU at $A5bn.
