Hostile and Friendly Takeovers on the Rise Again in a Reinvigorated M&A Market

FN Media Group Presents USA News Group News Commentary


Vancouver, BC – April 12, 2022 – USA News Group –A series of unpredictable moves by Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk has led to speculation that the world’s richest recorded person has opened the door to a hostile takeover of social media monolith Twitter Inc. (NYSE:TWTR). Beyond the potential for Musk to take decisive action, there are multiple other takeover bids and offers in place that represent premium prices for shareholders. These and other deals are driving overall M&A activity in the market back up, after a recent drop to pre-pandemic levels. Among these are a sizeable bid for energy tech developers Petroteq Energy, Inc. (OTCPK:PQEFF) by Viston United Swiss AG, a takeover offer by the billionaire Benetton family with Blackstone Inc. (NYSE:BX) of Italian infrastructure giant Atlantia SpA, and the $6.9-billion takeover of cyber security group SailPoint Technologies Holdings, Inc. (NYSE:SAIL) by Thoma Bravo.


Unlike the potential Musk/Twitter deal, a growing number of shareholders of Petroteq Energy, Inc. (OTC:PQEFF) are signalling their openness to a friendly takeover bid from clean technologies investment firm Viston United Swiss AG, which has an April 14th deadline.


At C$0.74 (US$0.59) per common share, Viston’s offer gives Petroteq a valuation of 279% over the closing price of C$0.195 on the TSX-V August 6, 2021—the day prior to the Canadian exchange’s cease trade order began.


This valuation also delivers a 1,032% premium over the TSX-V volume-weighted average price of $0.065 per common share for the 52-week period preceding April 15, 2021—the last trading day prior to the publication of the voluntary purchase offer in Germany.


From the top down, it appears that Viston’s offer has been favorably received by the entire Petroteq team. This includes unanimous intention to tender shares from the Board of Directors, the company’s Founder, Former Chairman and CEO Alex Blyumkin, and one of the company’s largest shareholders, Cantone Asset Management, LLC.


“After thorough consideration of all aspects of the Viston Offer, the advice provided by Haywood and consulting with its other advisors, the Board has unanimously determined to recommend that Shareholders accept the Viston Offer and tender their Common Shares,” said the Board in their official statement.


For many months, shares of Petroteq on the Canadian Exchange have ceased trading. However, in the USA, investors can continue to trade shares under the OTC symbol PQEFF, in a form of merger arbitrage trading.


Now with less than a week to go before the April 14, 2022 deadline, shares of PQEFF continue to trading at ~US$0.39 as of April 11, 2022. This means there’s still a near 50% premium left available for those who follow through offering their shares to the buyer through the official takeover offer website


The leveraged buyout market is soaring again, as evidenced by the $6.9-billion takeover of cyber security group SailPoint Technologies Holdings, Inc. (NYSE:SAIL) by Thoma Bravo. As per the deal, the US private equity group is buying the cyber security company at a price of $65.25 per share, which is a 31.5% premium to SailPoint’s closing share price on the preceding Friday, and a premium of 48% to its 90-day volume-weighted average price (VWAP).


“This transaction delivers significant immediate cash value to our stockholders and maximizes the value of their shares,” said Mark McClain, CEO and Founder, SailPoint. “The transaction will also allow us to pursue our long-term growth trajectory with greater flexibility and effectiveness to support our customers, expand our markets, and accelerate innovation in identity security with the backing of a strong financial partner with deep sector expertise.”


Shares of the Texas-based SailPoint surged to nearly close the gap, rising to more than $64 from $49.59 upon the first day of trading after the announcement was made official.


The M&A market could further explode, in what could become the year’s biggest deal, the Benetton family with Blackstone Inc. (NYSE:BX) are nearing a takeover offer for Italian infrastructure giant Atlantia SpA. According to data compiled by Bloomberg, Atlantia has a value of almost 65 billion euros ($71 billion) including debt. This means any takeover would be the biggest of the year so far, and would also rank as one of the biggest infrastructure deals of all time.


The Benettons already currently own approximately one third of Atlantia’s shares. Atlantia’s minority shareholders, Singapore sovereign fund GIC Pte. and Fondazione Cassa di Risparmio di Torino, are expected to invest in a new company that the suitors plan to set up for the deal.


There are still no definitive details on an offer, despite Bloomberg attributing its report to people familiar with the matter. Both the Benettons and Blackstone have so far declined to comment.


After being initially announced to join its Board of Directors, Twitter Inc. (NYSE:TWTR) CEO Parag Agrawal made a weekend statement that Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk would not be a Twitter Director after all.


“We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance,” tweeted Agrawal. “Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best. We have and will always value input from our shareholders whether they are on our Board or not. Elon is our biggest shareholder and we will remain open to his input.”


The reverse of direction immediately sparked speculation that Musk now has a gateway (and the resources) to increase upon his 9.2% ownership to gain the remaining 90.8%. By refusing the Director post, Musk avoided a maximum ownership cap of 14.9%.


Through what’s becoming a trademark coyness, Musk retweeted a list of Twitter’s top 10 accounts by follower counts that same morning, adding “Most of these ‘top’ accounts tweet rarely and post very little content. Is Twitter dying?”


“Twitter is more vulnerable than some of its internet peers to outside pressure because its founders don’t have special voting control,” wrote Justin Post, Director of Equity Research at Bank of America Securities in a note published after Musk revealed his stake in the platform.


In the meantime, Tesla itself announced its plans to transform Kane’s Furniture liquidation center in Florida into one of the most poverty-stricken neighborhoods in the country into a state-of-the-art delivery and repair center.


According to Tesla’s application documents the company has plans for the 4.21-acre site that align with the goals of the Community Redevelopment Area in targeting reinvestment as it will also enhance the site with structural improvements and the appearance of the property. Tesla plans to repaint the building, install a new roof and new signage, and eliminate the majority of the truck loading doors from the front of the building.


Whether or not Musk’s possible Twitter future involves a hostile takeover or whether it’s just a fun distraction from his other ventures is still up in the air.


‘The flip side to this is Twitter must deal with a wildcard investor that already owns 9% of the company and has the resources to buy the remaining 91%, said Don Bilson of Gordon Haskett Research Advisors to CNBC. “As volatile as Musk is, we could see a move like that made shortly. Or we could never see it all. I don’t think anything is off the menu with this guy.”


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