'Early days' in possible Eroad takeover

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Photo: ERoad

A repeat of the recent Pushpay saga could be possible as transport software company Eroad evaluates a takeover offer, the Shareholders’ Association says.

Eroad is subject to a $147 million offer from Canadian software group, Constellation, which has built a near 18 percent stake in the company.

Constellation, through its subsidiary Volaris, has offered $1.30 a share, a 69 percent premium to the pre-offer price.

Eroad shares traded as high as $2.35 a share in the past year and the share price was above $6.00 in 2021.

Shareholders’ Association chief executive Oliver Mander, who also owned a small stake in Eroad, said a repeat of the initial negative reaction to the bid for mobile donations company Pushpay was possible with Eroad.

Mander stressed it was still early days but said some shareholders may be unhappy with the offer.

“This is a non-binding, indicative offer. That means that the bidder itself is looking to do further due diligence,” he said.

“I’ve got no doubt that the company will be looking to apply appropriate governance processes to ensure that there is fair value received by any shareholders.

Mander said it was at a “really early stage” but some of the reaction the association had heard was that the offer to buy Eroad did not fully value the company’s opportunities.

Eroad declined an interview request with RNZ to discuss the takeover offer.

The offer for Eroad came as other New Zealand tech firms attracted overseas interest, such as the recent takeover of Pushpay which ended up going ahead after a revised offer.

Mander said it showed that New Zealand had the capability to develop technology that was of interest to the wider world.

But he said the concern was that the “next generation” of tech companies was not coming through to the listed market.

“There’s plenty of capital in New Zealand business, there’s plenty of people who are willing to invest in the types of companies that can improve New Zealand’s productivity,” Mander said.