DWS will have to trump ASG's bid if it wants to go ahead with its plan to acquire SMS Management and Technology.
SMS informed shareholders overnight that it considers ASG's offer to acquire 100 percent of its shares for $1.80 each in cash superior to the offer put forward by DWS back in February. DWS offered to acquire SMS for $1 in cash for each share plus 0.39 DWS shares.
Both offers value SMS at approximately $124 million, however, an independent evaluation said ASG's offer represents a 12.2 percent premium compared to DWS base on the mid-point valuation of its shares.
The SMS board said that an ASG acquisition would be more favourable to its shareholders over the DWS offer, following advice from independent financial advisers.
SMS notified DWS of its valuation, and as a result, DWS has until 19 June to put forward a counter offer. The SMS board is required to review any counter proposal in good faith to determine which offer is superior.
DWS said it was considering its options, which includes submitting a counter offer, though it is not obliged to do so.
ASG pulled the rug from under DWS on Tuesday night after it proposed a legally binding offer to acquire the struggling SMS. DWS intends to merge the two companies to create one of Australia's biggest IT services and body shopping firms with combined annual revenue of $463.7 million and a staff headcount of nearly 2000.
ASG, on the other hand, is yet to release a detailed glimpse of how SMS would operate under an acquisition.
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