ALU +28.47%: Ouch! Never a nice feeling when a stock that we recently sold gets a takeover bid at a ~34% premium. Today, Japanese semiconductor maker Renesas Electronics agreed to buy software firm Altium for $9.1bn / $68.50 per share, in what is the biggest acquisition yet of an Australian-listed company by a Japanese buyer. Canadian-based Autodesk was the last to have a crack at ALU at $38.50 showing what a huge result today’s bid is, and more than validating the board’s reluctance to sell to Autodesk back in 2021.
Renesas is a major supplier of automotive and power semiconductors with close ties to Toyota, Nissan and Honda but has been pushing into more lucrative embedded processors – which ALU’s tech can help with. The deal has full board support and we think is a high chance of completing.
When the acquirer’s shares drop ~5% as Renesas’ did in Tokyo today, it’s a good sign that ALU shareholders are getting a good price, one that only a strategic, trade-related buyer could justify.
- We regret our sale of ALU last month – sorry all! As a guide, the impact here is around 150bps of missed performance in the Active Growth Portfolio.
MM believes the Renesas deal will complete at $68.50
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