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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 owner Meta Platforms revealed that its advertising
revenue was hit by tighter privacy controls installed on Apple
Inc 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)
(Reporting by Riya Sharma in Bengaluru; Byron Kaye and Jaskiran
Singh; Editing by Devika Syamnath, Subhranshu Sahu, Uttaresh.V
and Sriraj Kalluvila)
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