Telus Digital Acquisition Offer: TIXT Stock Valuation Reevaluated

Telus Digital (TIXT) has received a $398 million acquisition offer from Telus Corporation, translating to $3.40 per share in cash. BofA has removed its rating on the stock, citing that the shares no longer reflect fundamental trading values. Analysts forecast an average target price of $3.77 with a high estimate of $6.00 and a low estimate of $3.00, implying an upside of 2.72% from the current price of $3.67. The estimated GF Value for TELUS International in one year is $10.88, suggesting a 196.46% upside from the current price.

Title: Telus Corporation Submits Non-Binding Indication of Interest to Acquire Full Ownership of Telus Digital

Vancouver, B.C. – Telus Corporation (TSX: T) has submitted a non-binding indication of interest (IOI) to acquire full ownership of Telus Digital (TSX: TIXT), a significant move aimed at enhancing AI capabilities and SaaS transformation across multiple sectors. The proposed acquisition, valued at approximately $398 million, would translate to $3.40 per share in cash.

The IOI, submitted to the board of directors of Telus Digital, outlines a potential transaction where Telus would acquire all issued and outstanding subordinate voting shares and multiple voting shares not already owned by Telus for a price per share of $3.40. This represents a premium of approximately 15% over the closing share price on the New York Stock Exchange (NYSE) on June 11, 2025, and a premium of approximately 23% over the 30-day volume weighted average trading price based on Canadian and U.S. composites.

Telus believes that closer operational integration between the two entities will enable enhanced AI capabilities and SaaS transformation across telecommunications, health, agriculture, and consumer goods sectors. The acquisition is expected to drive positive outcomes for customers and investors.

The IOI is subject to several conditions, including confirmatory due diligence, agreement on transaction structure, and approval by the Telus Digital board of directors. Furthermore, the consummation of the acquisition would be contingent upon customary closing conditions, including shareholder approvals and court approvals.

Analysts have responded to the news with varying forecasts. Bank of America (BofA) has removed its rating on Telus Digital shares, citing that the shares no longer reflect fundamental trading values. The average target price forecast by analysts stands at $3.77, with a high estimate of $6.00 and a low estimate of $3.00, implying an average upside of 2.72% from the current price of $3.67.

The estimated GF Value for Telus Digital in one year is $10.88, suggesting a potential upside of 196.46% from the current price.

The acquisition, if successful, would strengthen Telus's position in the digital transformation landscape and potentially unlock significant synergies and growth opportunities.

References
[1] https://www.telus.com/about/news-and-events/media-releases/telus-submits-non-binding-indication-of-interest-to-acquire-full-ownership-of-telus-digital