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Renesas Electronics' $9.1 billion bid sent ASX tech sector soaring yesterday

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2024-02-16

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The $9.1 billion bid for Altium from Japanese giant Renesas Electronics sent the ASX’s tiny tech sector sharply higher on Thursday.

The agreed bid helped push fellow mega-caps WiseTech (up 4.7% - valued at more than $26 billion), Xero (up 5.7% to nearly $18 billion), NEXTDC (up 3.4% to more than $7 billion), and TechnologyOne (up 3% to over $5.3 billion).

Even stricken Appen (ruined by Google canceling a big contract) saw its shares leap 10% as hope sprung eternal for the punters still in this $70 million stock.

Renesas on Thursday said it would acquire 100% of the ASX-listed software firm for $68.50 per share, a 33% on the stock’s last closing price and 30% above its all-time closing high.

Its shares soared on the news, closed up 29% higher at $66.08 (for a value of $8.72 billion).

“The acquisition enables two industry leaders to join forces and establish an integrated and open electronics system design and lifecycle management platform that allows for collaboration across component, subsystem, and system-level design,” Renesas said in a statement on Thursday.

The Japanese chipmaker, which would finance the deal with bank loans and cash on hand, said the acquisition would allow it to better manage electronics designing for customers as Altium’s main business is making tools to design chip circuit boards.

Altium, headquartered in San Diego, is involved in the development and sales of computer software for the design of electronic products. Its technology helps power a host of electronic devices from smartphones to airplanes.

Under the arrangements of the deal, chief executive Aram Mirkazemi will continue to lead the company as a subsidiary of Renesas.

“I strongly believe that electronics is the single most critical industry to building a smart and sustainable world,” he said in a statement to the ASX announcing the deal.

“Renesas’s visionary leadership and commitment to making electronics accessible to all resonates strongly with Altium. ... Having worked closely with Renesas as a partner for nearly two years, we are excited to be part of the Renesas team as we continue to successfully execute and grow.”

Altium chairman Sam Weiss also endorsed the proposed deal, which he called a “compelling” offer for investors.

He said Altium’s board and management had carefully evaluated the offer against the company’s medium- and long-term growth prospects and market opportunities, and “have unanimously formed the view that the proposal represents attractive and certain value for Altium shareholders”.

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