Pushpay is the subject of a $1.5 billion takeover bid. Photo / NZ Herald
The New Zealand Shareholder’s Association (NZSA) is the latest Pushpay shareholder to announce it will vote against a deal to buy out the church donations software company.
The association held votes as a proxy and would use those as its platform to vote down the $1.34 a share offer, valuing the company at $1.54 billion - the lower end of its independently assessed valuation range.
Shareholders holding at least 10 per cent of Pushpay collectively announced this week they would reject the offer, including the Accident Compensation Corporation (ACC), Nikko Asset Management, ANZ Investments and Fisher Funds.
Sixth Street, a global investment firm, and BGH Capital, an Australia and New Zealand-focused private equity firm, launched a collective scheme of arrangement to buy the company in October last year.
Together, entities associated with Sixth Street and BGH Capital held 20.34 per cent of Pushpay.
In an assessment report released to members on Wednesday, NZSA chief executive Oliver Manders said it believed the offer price did not provide a compelling justification for long-term investors.
“The decision of whether to accept the offer made by Pegasus is ultimately down to the differing needs of shareholders. While the offer made by Pegasus may be attractive in the short-term, NZSA continues to support the objective of long-term value for investors.”
He had discussed the offer with PushPay representatives and directors on a number of occasions since early February, he said.
It was not clear how many proxy votes the NZSA held.
The anti-Pushpay takeover club
ACC had been an investor in Pushpay since its listing on the NZX and currently owned 6.2 per cent of the total shares on issue.
Earlier this week, an ACC spokesman said subject to there being no material change in market conditions or the NZD/USD exchange rate, ACC intended to vote against the acquisition of Pushpay at $1.34 per share by Pegasus Bidco Limited under the proposed Scheme of Arrangement.
“ACC believes the bid price undervalues Pushpay and notes that it only just falls within the Independent Adviser’s valuation range.”
Earlier this month, Grant Samuel & Associates, an adviser appointed by Pushpay to assess the offer, valued the church-management software company in the range of $1.33 to $1.53 per share.
Some shareholders expressed outrage when the board recommended the offer, saying it undervalued the company.
The acquisition price was 16.7 times underlying earnings, based on the midpoint of Pushpay’s guidance of US$56 million (NZ$86m) in the 2023 financial year.
ANZ Investments - which owned 2.7 per cent of Pushpay and had been an investor with Pushpay since 2018 - also announced that it intended to vote on behalf of its clients against the deal.
Craig Brown, head of Australasian equities, said the offer is opportunistic and does not reflect the attractive growth potential of Pushpay.
“Pushpay’s market-leading suite of church software is well-placed to benefit from the ongoing digitisation of church management services and donations,” Brown said.
“We consider the Independent Adviser’s assumption that Pushpay will achieve earnings growth of just 2.5 per cent per annum beyond 2027 as conservative.”
Pushpay chairman Graham Shaw said the board had explored options for more than six months, including staying listed, and this was the best offer.
“It provides shareholders with an opportunity to accelerate a capital return, while also mitigating the risks and uncertainties that are otherwise involved in executing Pushpay’s strategic plan over time,” he said in a statement.
The board of directors said $1.34 was “an attractive price” and has unanimously recommended shareholders vote in favour of the scheme of arrangement.
A meeting to vote on the scheme will be held on March 3 in Auckland and online.