Shares in Telit Communications (TCM) are on the rise, amid speculation that a potential takeover may be on the cards. Investors will surely be grateful to see some potential upside for their stock, after the tech group's well-documented summer of discontent. Shares in the enabler of the Internet of Things had been hammered following weaker-than-expected half-year results, the departure of former chief executive Oozi Cats and disappointing financial guidance for the year ending December 2017.
The first murmurings of deal making came from an FT report, alleging that private equity buyers are considering making offers for “a large part of the business”. The piece notes that these companies include Berkshire Partners, Vector Capital, Apax, Advent and Battery Ventures, although no offers have been lodged yet.
Meanwhile, Chinese investment house Run Liang Tai Management took a position in Telit only a few weeks ago, and has built this steadily to 14 per cent. It is now number one on the shareholder register, ahead of Mr Cats himself. There are few details available about this manager, beyond the fact that it was incorporated in 2016 and has also reportedly invested in video platform iQuiyi, a subsidiary of China’s Baidu.
Telit has now issued a statement acknowledging “recent press coverage” about the potential sale of its automotive business. Management confirmed that this was one product line, among others, under review by the board as it considers the future of certain areas which may be unsuited to the group’s long-term strategy. This process is being led by Rothschild, and “is at a very early stage”.
