IncentiaPay rejects takeover offer, cites undervaluation and uncertainty

Loyalty pays. Just ask IncentiaPay (ASX: INP) which has firmly rejected an unsolicited takeover proposal from a Melbourne-based loyalty and rewards program operator with a focus on the dining sector.

The indicative offer, made on October 20, 2023, sought to acquire 100% of the IncentiaPay’s shares for a cash value of $0.0049 per share. INP shares last closed at $0.007.

The Indicative Proposal came with certain conditions which hinged on IncentiaPay’s share price not declining further from its standing at $0.007 per share at the time the offer was made. Additionally, the proposal required the agreement of the Company’s debt holders to convert their debt into equity.

The IncentiaPay Board conducted a thorough assessment of the Indicative Proposal. After careful consideration, they decided that it did not align with the best interests of the Company’s shareholders, particularly citing the undervaluation of the IncentiaPay inherent in the offer.

In light of the undervaluation, the Board firmly rejected the offer, expressing their dedication to the company’s growth and the protection of shareholder interests who have been instructed to take no action with their current shareholdings.

The rejection and assessment of the Company’s valuation by the Board, however, signalled a willingness to engage in further negotiations.

Incorporated in 1994, IncentiaPay, through its Entertainment-branded subsidiaries, operates marketplaces which act as a platform for offers and rewards. Their primary objective is to connect merchants seeking increased business with consumers in search of value-driven entertainment, lifestyle, and leisure experiences.

Entertainment, a division of IncentiaPay, is an established and trusted source of member-exclusive offers and deals having once been best known as the giant book of coupons that members would receive at the start of each year for dining and entertainment. The company now extends its services to fundraisers, merchants, and enterprises, offering advanced data and campaign analytics.

IncentiaPay’s revenue generation model revolves around member subscription fees and marketplace features that provide data-as-a-service.

For FY23, IncentiaPay reported $17.2 million revenue which was slightly down on the $20.6 million reported in the previous year. The Company logged a net loss after tax of $20.4 million but has since implemented significant cost reductions that will deliver annualised cost savings of $5 million.