Advanced Energy Discloses New Offer To Acquire XP Power; Is The Latest Proposal Enticing Enough?

Advanced Energy Industries, Inc. AEIS disclosed a possible offer to acquire the entire issued and to be issued shares of XP Power Ltd. XPPLF for £19.50 per share in cash.

The proposal reflects a 68% premium to XP Power’s closing share price of £11.64 as of May 20, 2024 (the last business day before this announcement) and an 82% premium to 30-trading day volume weighted average price of £10.74 as of May 20.

Also, the proposal reflects a 76% premium to XP Power’s closing share price on the trading day before the May 7 proposal of £19.50 per share was submitted to the XP Power board.

The total proposed consideration is £571 million, which is based on the diluted ordinary share count of 24.0 million, net debt of £103.4 million (as of March 31, 2024), and no further dividends to be declared or paid after this announcement. 

Earlier, the company had submitted three all-cash proposals to the company, which the Board of XP Power rejected. 

On November 5, 2023, the company offered £18.50 per share in cash, valuing XP Power’s equity at £369 million.

Steve Kelley, the president and CEO of Advanced Energy said, “We believe that the proposed offer for XP Power provides compelling value for both Advanced Energy’s and XP Power’s shareholders. By expanding our portfolio of products and technologies, and combining our technical capabilities, we believe we will be better able to meet the growing needs of our customers.”

As of March 31, 2024, cash and cash equivalent stood at $1.02 billion.

Investors can gain exposure to the stock via Invesco S&P SmallCap Information Technology ETF PSCT and Mid Cap US Equity Select ETF RNMC.

Price Action: AEIS shares closed higher by 2.13% at $107.88 on Monday.

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