Olo Inc.'s $10.25 Buyout: A Closer Look at Valuation and Governance Concerns

The proposed $10.25 buyout of Olo Inc. (OLO) by Thoma Bravo has sparked debate over whether the price fairly reflects the company’s intrinsic value. While analysts’ price targets hover near the offer price, governance concerns cast a shadow over the deal’s fairness.

Valuation: A Tenuous Equilibrium
Analysts’ price targets for OLO in 2025 suggest a consensus of limited upside. The average target is $10.17, with a high of $11.50 and a low of $8.50 [2]. The most recent forecasts, including RBC Capital’s $10.25 target with a 0.20% upside [5], align closely with the buyout price. However, these targets are narrow and cautious, reflecting skepticism about Olo’s growth trajectory. The current stock price of $10.24 [1], just 1 cent below the offer, implies the market has largely priced in the deal’s outcome. Yet, the $10.25 offer represents only a 65% premium over Olo’s unaffected share price of $6.20 in April 2025 [3], a modest return for a private equity buyout. This raises questions: Is the price a fair reflection of Olo’s long-term potential, or a floor set by governance constraints?

Governance: A Structural Imbalance
Olo’s corporate governance structure exacerbates concerns about the deal’s fairness. Insiders control 82% of the voting power through a dual-class share structure [1], enabling the board to approve the buyout without meaningful shareholder dissent. The board’s unanimous endorsement of the $10.25 offer, under the dominance of founder and CEO Noah H. Glass, has drawn scrutiny. Critics argue that the lack of a robust auction process—a standard practice in major M&A—suggests underpayment to minority shareholders [2].

Legal investigations by Bleichmar Fonti & Auld LLP are probing whether the board adequately justified the offer price and disclosed material risks [1]. The firm’s inquiry focuses on potential breaches of fiduciary duties, particularly given the board’s concentrated control. Shareholders are now advised to participate in legal proceedings that could compel a higher bid or revise terms [4].

The Paradox of Price and Power
The $10.25 buyout price appears to straddle a precarious line: it meets analyst expectations but falls short of addressing governance flaws that may have depressed Olo’s valuation. While the offer’s proximity to price targets suggests a technically sound valuation, the absence of competitive bidding and the board’s structural dominance undermine its legitimacy. For shareholders, the deal is not a clear win—it is a compromise shaped by power dynamics rather than market forces.

In the end, the fairness of the buyout hinges not just on numbers but on the integrity of the process. Until governance concerns are resolved, the $10.25 price tag remains a question mark, not a final answer.

Source:
[1] Evaluating Shareholder Rights in 2025 M&A [https://www.ainvest.com/news/evaluating-shareholder-rights-2025-legal-scrutiny-governance-implications-olo-fubo-rkda-nsc-2508]
[2] A Deep Dive into GES, SHCO, and OLO Deals [https://www.ainvest.com/news/high-stakes-shareholder-corporate-takeovers-deep-dive-ges-shco-olo-deals-2508]
[3] OLO STOCK NEWS: Olo Inc. (NYSE:OLO) is Facing an Investigation [https://www.morningstar.com/news/globe-newswire/9499557/olo-stock-news-olo-inc-nyseolo-is-facing-an-investigation-into-the-1025-merger-current-shareholders-are-notified-to-contact-bfa-law]
[4] OLO INVESTIGATION ALERT: The Olo Inc. Board may have Breached its Fiduciary Duties [https://www.globenewswire.com/news-release/2025/07/14/3114762/0/en/OLO-INVESTIGATION-ALERT-The-Olo-Inc-Board-may-have-Breached-its-Fiduciary-Duties-Current-Shareholders-are-Notified-to-Contact-BFA-Law-NYSE-OLO.html]
[5] Olo Analyst Ratings and Price Targets | NYSE:OLO [https://www.benzinga.com/quote/OLO/analyst-ratings]