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A head of steam is building up against a $1.5 billion takeover offer for mobile donations company Pushpay.
Two institutional shareholders, ACC and Nikko Asset Management with a combined 7.6 percent stake in the firm, have come out publicly and said they will vote against the offer.
Australian private equity firm BGH Capital and US investment company Sixth Street, which hold about 20 percent, have offered $1.34 a share for Pushpay, and got the backing of the Pushpay board, with the chair Graham Shaw talking of the compelling value of the bid.
Nikko Asset Management said the offer was at the bottom end of the $1.33 to $1.53 a share value in a valuation report, and undervalued the company.
"Pushpay management's own forecasts for near-term earnings and medium-term growth reflect their own optimism about the future growth prospects for the company," it said in a statement.
"There are emerging opportunities for the company to serve new markets, like the North American Catholic market, that are already beginning to show good momentum."
It added that there was room for significant growth in mobile donations for churches, and that Pushpay generated positive cashflow, had strong finances and was extremely sound.
"All these factors indicate that Pushpay is worth more than is being offered.
"As a large, active shareholder we have expressed these views to the company's board and management and encourage other shareholders to also vote against the offer as it stands," Nikko said.
Nikko's opposition mirrored that of the ACC, which said assuming no change in market conditions or the New Zealand dollar- US dollar exchange rate, it would vote against the deal.
Investment analysts were sceptical about the bid when it was first lodged, saying it looked opportunistic and cheap.
The takeover needs the approval of at least 75 percent of the shareholders not associated with the offer.
