Pendula launches takeover bid for Whispir at 19pc premium, but with a catch

Within days of Whispir announcing two new product releases, Pendula has delivered on its previous letter of intent by putting forward a a non-binding indicative offer of 57 cents per share, which would give the target a market capitalisation of close to $75 million, and an implied enterprise value of $78.35 million.

Having already unanimously recommended that shareholders reject the Soprano offer after an independent expert's report deemed it 'not fair but reasonable', Whispir's board has pledged to work with Pendula towards a binding offer that can be recommended.

At the time of writing, WSP shares have only risen marginally today and are still 7 per cent shy of Pendula's offer price - a discount that likely stems from the conditional nature of the proposal.

Aside from the more standard conditions of due diligence and securing the target board's unanimous support, the offer is also contingent on Whispir founder and outgoing CEO Jeromy Wells - who holds around 10.5 per cent of shares - choosing to remain invested in the company.

The Pendula proposal includes two options - either a scheme of arrangement where shareholders can choose a mix of shares and cash, or an asset sale whereby the suitor would buy up Whispir subsidiaries.

For the former, Pendula would require the founder to choose the fixed cash/scrip ratio option, and under the latter Wells would need to commit to reinvesting 50 per cent back into Pendula.

Pendula has asked Whispir for an exclusivity period of four weeks excluding the holiday shut-down period between 25 December 2023 and 5 January 2024, with cost recovery rights if exclusivity is breached or Whispir cuts discussions short.

Meanwhile, the Soprano offer is scheduled to close at 7pm AEDT on 21 December unless an extension is made by the original bidder, which was founded by Dr Richard Favero in 1994 and was sold to Norway's Link Mobility for $560 million in 2021.

Today, Soprano is well-known for its Communications Platform as a Service (CPaaS) with around 3,500 customers from large enterprises and government utilising its technology. Since September the company has been headed up by CEO Mark Bayan, who had previously led ASX-listed artificial intelligence (AI) annotation service company Appen (ASX: APX).

In its statements to Whispir shareholders, Soprano has encouraged they accept the offer based on several reasons, including that institutional shareholders such as Spheria Asset Management, Forager Funds Management and AustralianSuper have sold all or most of their holdings in recent months.

Soprano also claims that its offer 'removes exposure to further dilutionary equity funding risks for Whispir shareholders', who have seen their holdings diluted by 10.6 per cent over the past year.

As a leading software-as-a-service (SaaS) communications workflow platform that automates interactions between organisations and people, Whispir has announced two new products launches this week.

The first is Whispir Transact which aims to drive high-value conversion through digital messaging workflows like payment gateways, electronic signature and general business process automation.

The second product is Whispir Off-Platform Messaging, which enables organisation-wide compliant messaging.

"Effective customer and employee engagement for enterprise has never been more important," said Jeromy Wells on Tuesday.

"The new Whispir innovations launched today, focus on delivering incremental customer value and generating new revenue streams for our customers by making communicating and engaging with people at scale – faster, smarter and more productive.

"Whispir continues to innovate through investment in advanced and integrated digital messaging, with a commitment to privacy, security and compliance – driving increased business returns for our customers," said Wells, who will continue as CEO until February before transitioning to an executive director role. The board is currently searching for a replacement CEO.