Allens advises Nitro on takeover defence

Mergers & Acquisitions Private Equity

Allens has advised Nitro Software Limited on its defence of competing takeover bids from Australian PE firm Potentia Capital and KKR-backed global technology group Alludo.

The protracted takeover battle saw numerous bid price increases, two takeover offers and a scheme of arrangement proposal from Alludo, court proceedings in relation to the Alludo scheme and two separate proceedings at the Takeovers Panel.

Potentia Capital's ultimately successful bid initially took the form of an unsolicited approach at $1.58 per share in October 2022 following a pre-bid stake of 19.31 per cent. Its shareholding has now reached in excess of 90% at a final acquisition price of $2.20 per share.

Alludo's bid took the form of an infrequently used transaction structure, a dual scheme of arrangement combined with a concurrent off-market takeover offer (with a 50.1% minimum acceptance condition).

'The battle for Nitro exposed significant changes to the way that PE managers are approaching listed company opportunities, particularly when target boards refuse to provide access to due diligence,' said lead Partner Noah Obradovic.

'With respect to listed markets, a significant valuation divide has emerged between public equity markets and target boards. This is particularly the case in the technology sector where valuations have come off materially in a relatively short period of time, meaning that securing due diligence based on standard premiums to recent share trading performance is not guaranteed. Potentia's acquisition of Nitro demonstrates that, in certain situations, some PE bidders may be prepared to eschew the target board entirely by going direct to shareholders, both in the form of acquiring a significant pre-bid stake and launching a takeover bid (without the need for a target board recommendation). With that said, the use of hostile takeover bids is very transaction-specific and is unlikely to become the 'norm' for P2P transactions'.

'It was a privilege to navigate this incredibly complex takeover process, and we congratulate Nitro and Potentia on the successful transaction.'

Allens legal team


Noah Obradovic (lead Partner), Tom Story (Partner), Rachel Werner (Senior Overseas Practitioner), Alex Knights (Associate), Jason Bath (Lawyer), Kiara Di Carlo (Lawyer), Chiara Biviano (Lawyer), Megan Jones (Lawyer)

Disputes & Investigations

Kim Reid (Partner), Tyler Goldberg (Associate), Brandon Smith (Lawyer)