Why are PME and ALU in focus?

Highlights:

• Altium Limited (ASX: ALU) experiences a surge in share price following acceptance of Renesas Electronics Corp takeover offer, valued at AU$68.50 per share.
• Altium's board unanimously accepts the proposal, citing alignment of vision with Renesas and attractive value for shareholders.
• Pro Medicus Limited (ASX: PME) witnesses a decline in share price despite reporting strong financial performance, with revenue up by 30.3% and significant contract wins totaling $200 million

Altium Limited (ASX: ALU) Share Price Surges Amid Renesas Takeover Deal

Altium Limited (ASX: ALU) has seen a remarkable surge in its share price following the announcement of a takeover deal by Renesas Electronics Corp. The Tokyo-based Renesas Electronics, a leading supplier of advanced semiconductor solutions, has proposed to acquire 100% of Altium shares.

Takeover Deal Details

Under the terms of the agreement, Altium shareholders are set to receive A$68.50 per share in cash, representing a substantial 31% premium to Altium's all-time high share price reached on February 12, 2024. This offer places Altium's valuation at $9.1 billion, with an enterprise value to EBITDA ratio of 50x.

Altium's board has unanimously accepted the offer and recommended that shareholders vote in favor of the takeover, contingent upon the absence of a superior proposal and an independent expert's confirmation of the scheme's benefits to shareholders.

Rationale Behind Acceptance

The decision to accept the takeover offer stems from the belief that Renesas shares Altium's vision of establishing a seamless and open electronics system design and lifecycle management platform. Altium's directors deemed the proposal as offering attractive and certain value, especially in comparison to the company's medium to long-term growth prospects.

Altium CEO Aram Mirkazemi expressed confidence in the alignment of visions between the two companies and emphasized the potential for continued growth and success under Renesas' leadership.

Pro Medicus Limited (ASX: PME) Faces Share Price Decline

In contrast to Altium's soaring share price, Pro Medicus Limited (ASX: PME) experienced a decline in its stock value, shedding over 6% in morning trade to $101.37.

Half-Year Performance Review

Pro Medicus reported strong financial results for the six months ending December 31, with notable increases in revenue, underlying profit before tax, net profit, and cash reserves. The company's performance was primarily driven by heightened revenue from North America and significant contract wins, collectively valued at $200 million.

Positive Outlook Despite Market Reaction

Despite the market's response to Pro Medicus' results, CEO Dr. Sam Hupert remains optimistic about the company's growth prospects. He highlighted the company's robust sales pipeline and its ability to maintain a strong growth trajectory, particularly with the increasing adoption of its cloud-based modular

solutions.

While Altium's future lies in Renesas' hands and Pro Medicus navigates market fluctuations, both companies remain poised for continued success in their respective sectors.

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