Olo Rejects Higher Offer, Sticking with Thoma Bravo Deal Amid Mixed Analyst Views

Olo Inc. has rejected a higher unsolicited purchase offer and will proceed with its earlier agreement with Thoma Bravo for $10.25 per share. Analysts' average price target suggests a slight upside from the current market price, but the GF Value indicates a potential downside based on historical and future performance estimates.

Olo Inc. (NYSE: OLO), a provider of a cloud-based, on-demand commerce platform for multi-location restaurant brands, has rejected a higher unsolicited acquisition offer. The company announced it will proceed with its earlier agreement to be acquired by private equity firm Thoma Bravo for $10.25 per share.

On July 3, an unidentified entity, referred to as "Party A," submitted a non-binding letter proposing to acquire all outstanding shares of Olo for $13.00 per share. This offer included 32.5% in cash and 67.5% in Party A stock, with an unspecified fixed exchange ratio. However, Olo's board determined that Party A's proposal did not constitute a Superior Proposal under its existing Merger Agreement with Thoma Bravo [2].

Olo's board cited several financial and execution risks associated with Party A's proposal, including potential declines in Party A's stock price, significant leverage planned for the combined company, debt service costs, and uncertainty about achieving projected revenue and synergies. Additionally, there were concerns about limited recourse if Party A lost debt financing, exposure to stock value fluctuations, the requirement for Party A stockholder approval, and greater regulatory risks compared to the existing Thoma Bravo agreement [2].

Following the rejection of Party A's offer, Olo informed the entity that it would not engage in discussions or negotiations regarding the proposal. The company will now proceed with its previously agreed-upon sale to Thoma Bravo [2].

Analysts have provided mixed signals regarding Olo's stock price. The average price target suggests a slight upside from the current market price, indicating optimism about the company's future prospects. However, the GF Value indicates a potential downside based on historical and future performance estimates, suggesting caution among some investors [3].

Olo's decision to reject the higher offer and proceed with the Thoma Bravo deal may impact the stock price in the short term. However, the long-term implications will depend on the successful integration and execution of the Thoma Bravo acquisition.

References:
[1] https://www.cnn.com/markets/stocks/OLO
[2] https://www.investing.com/news/stock-market-news/olo-said-it-rejected-a-13share-unsolicited-acquisition-offer-93CH-4156165
[3] https://seekingalpha.com/news/4473012-olo-received-13share-cash-and-stock-offer-after-thoma-bravo-deal---proxy