The board of Australian IT services provider SMS Management and Technology has decided to back a bid for the company made by rival ASG Group after the firm yesterday made its offer official.
It formalises a bidding war for SMS M&T, which had been close to signing a deal to sell itself to fellow IT services provider DWS before ASG revealed its intention to swoop in late last month.
SMS and DWS had signed a scheme of implementation arrangement in late February under which DWS proposed to buy SMS for $1 in cash and 0.39 shares for each SMS share for a total of $1.66 per share. The SMS board had recommended shareholders vote for the deal.
However late last night it decided it liked ASG's offer of $1.80 per share in cash better.
SMS' shares were worth $1.69 at the time of ASG's initial expression of interest, and at the time of writing are sitting at $1.83.
DWS now has three business days to make a counter offer. The company said it was assessing its options.
ASG's offer will remain on the table until June 21.
