(Bloomberg) -- Dye & Durham Ltd. shares plunged after the Canadian software provider said its board turned down a $2.8 billion offer by a management group and intends to stay as a public company.
A special committee of the board recommended that the Toronto-based company “continue to pursue its existing business strategy which contemplates further growth through acquisitions” under Chief Executive Officer Matthew Proud, Dye & Durham said Friday in a statement.
Dye & Durham shares plunged as much as 8.6%, its biggest drop since March, and traded at C$39.58 as of 10:11 a.m. on the Toronto Stock Exchange, its lowest since May. The stock had risen as high as C$53.68 since the firm's trading debut, though sagged in recent weeks amid a market selloff of high-growth technology companies.
A group of executives made an approach in May, proposing to buy the company for C$50.50 a share. One large shareholder, Mawer Investment Management Ltd., immediately expressed its opposition to the go-private transaction and urged the company to stay public. Mawer owned about about 9% of the company at the time.
Dye & Durham said the board considered other alternatives including selling to other buyers, but prefers the status quo. The software firm has done numerous deals since going public in 2020 at C$7.50 a share.
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Separately, the company said it agreed to a new C$1.8 billion credit facility to repay existing debts and help fund its acquisition strategy. It also granted about 6.85 million in stock options to Proud “to further align the interest of the chief executive officer with that of shareholders.”
Dye & Durham provides software for legal and business professionals, offering clients a platform for accessing legal registries and public records data. Its products help speed up document searches, document creation and electronic records filings.
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