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“Telus informed us that they were revoking their Indicative Proposal. No reasons were given,” the Australian software seller said.
Telus did not immediately respond to a request for comment regarding the withdrawal of the proposal.
On Thursday, trading in Appen’s shares was halted after they surged more than 29% to A$8.27, below the indicative offer price of A$9.50 a share, as investors positioned themselves for an eventual buyout — including from another company — while allowing for the possibility the talks could fall through.
“Appen engaged with Telus in good faith…to better understand the conditions of the proposal and to agree an appropriate confidentiality and standstill agreement,” the Australian firm said in its latest statement.
Appen had signalled in its earlier statement it would engage with Telus to solicit a higher offer.
A deal would have helped build the Canadian firm’s offering at a time when corporate clients around the world are moving to automate many services for a customer base that has shifted online due to the COVID-19 pandemic.
It would have also given Appen shareholders an opportunity to recoup investment losses since February when its star customer and Facebook (NASDAQ:FB) owner Meta Platforms revealed that its advertising revenue was hit by tighter privacy controls installed on Apple Inc (NASDAQ:AAPL) computers and smartphones.
“While we do see potential for substantial synergies … we see Appen as being in a weaker negotiating position to extract a higher bid from Telus International,” Citi analysts wrote in a note.
“We do see potential for another suitor, especially a competitor to Telus.”
In a short trading update, Appen also said it expected its first-half profit to be materially lower than last year, although it expected a pick-up in earnings in the second half.
The company, which sells a range of automation software including programs to help companies like Facebook collate user data, earlier this year scrapped its outlook for the first time since going public — with an issue price of 50 cents in 2015.
($1 = 1.4096 Australian dollars)
