Fronde downplays takeover talk
Fronde is downplaying speculation it might be subject to a takeover after signalling possible good news for shareholders.
The Wellington technology company, which employs 330 staff, advised shareholders not to sell their shares after directors agreed to a request to provide confidential information about the firm to an unnamed party.
Director Wayne Norrie conceded that people might leap to the conclusion that another company was carrying out due diligence on Fronde to make a takeover bid.
However, he said that if he was reading between the lines he would view that as "unlikely".
He said another explanation was that one or more of Fronde's investors might want to increase their stake in the firm, whose shares are traded on the unlisted over-the-counter market.
Fronde's statement to shareholders said the information request might result in "a potential transaction" that could affect the value of its shares and recommended no shareholders sell their shares "at this point in time".
"Something is happening, with people either getting on the bus or off the bus," Norrie said.
Fronde, which has long hovered around break-even, reported in November that it had quadrupled its interim profit to $1.65 million in the half-year to September on the back of a 45 per cent jump in revenues to $32m.
The company attributed the strong performance to a turnaround in its business in Australia and substantial growth in its professional services business in Wellington.
Norrie said the sooner it was able to provide more information on the potential transaction the better, "but the timing on these things is never under the control of any single party".
- © Fairfax NZ News