The news from Fortnox this morning came as a surprise as it was announced that Visma, a competitor of Fortnox, has made bid to take-over Fortnox. Visma offers 24 SEK each share and the offer runs the first three weeks of April. The price offered for Fortnox is 1.4 billion SEK. Visma is a Norwegian company founded in 1996, active in the Nordic countries, Netherlands, and Baltic States and have grown via numerus acquisitions since (10 in 2014 alone).
Lately there have been some turmoil in the board of Fortnox, according to the local newspaper Smålandsposten. The main owner and member of the board Olof Hallrup, holder of app. 20 % of the shares in Fortnox, has asked 2 (possible 3) board members to leave the board – including the chairman. Shortly after the year-end report, the CEO left the company because of disagreement on strategy vis a vis Olof Hallrup. A new CEO was meant to be appointed before the annual general meeting, planned at March 17th, where also 3 or 4 new board members and a new chairman were to be elected. With the take-over bid, the general meeting is postponed until May 13th, and a new CEO and new board members might not be needed at all.
Interesting though, is the fact that the majority of the board recommends the offer – except Olof Halldrup who finds that the offer does not reflect the full potential of the company. Find the entire press release in Swedish here.
Power struggle in Fortnox?
To a bystander this seems very much like a power struggle between the main owner and the rest of the board. It might be that the offer is made public just three days before a general meeting, where the majority dramatically will change in favour of Olof Hallrup. This could in fact be the root of the disagreement between the former CEO and Olof Halldrup.
Fortnox take-over bid – an acceptable offer?
Personally, I tend to favour the bid, and hope Visma will raised it by mid-April. I bought at 8.8 SEK – this was one of my first investments in start-ups – and with 24 SEK, I made 173 % on my position, not counting the small dividend. Today the immediate reaction of the market was a lift of 31 % – from 18.2 SEK on Friday to 23.9 on Monday.
On the other hand, Olof Halldrup could be right in his assessment that the offer does not reflect the potential of the company. The number of users have the past years, the company has invested in new services, and made a better product offer through strategic partnerships – the latest announced 5 days ago with Aros Kapital offering loans for businesses. If the growth continues, the potential for investors could be much more than the 32 % gained today.
The question is what Vismas plans are. The company de-listed in 2006, and if the plan is to buy all shares and de-list Fortnox, I might as well sell sooner as later. On the other hand, if Visma only intends to acquire the majority of shares – but leave the company listed – I could still be part of the future growth. And a cash-strong owner as Visma, could fuel growth and even pave the road for an international expansion. Well, this is just speculation, and I will have to study the offer in detail, presumably within the next two weeks. Then I will decide.
Find my latest post from February on Fortnox here.