ASG has put in a legally binding offer to acquire SMS Management and Technology, heating up the bidding war against rival bidder DWS.
ASG officially offered to buy 100 percent of SMS' shares for $1.80 each in cash, the same deal it proposed in a non-binding offer last month.
The offer directly competes with the previous merger proposition from Melbourne rival DWS, which offered to buy the IT services provider back in February for $1 in cash and 0.39 DWS shares for each SMS share. Both offers value SMS at approximately $124 million.
Last night, ASG put forth the legal binding offer after completing the necessary due diligence and entering an agreement with its parent company, Japan's Nomura Research Institute, that guarantees payment obligations if the deal goes ahead. ASG said it didn't require approval from the Foreign Investment Review Board.
SMS said it would consider the terms of ASG's offer, and would notify shareholders of any further updates.
When ASG initially indicated interest in an acquisition, SMS said it may lead to a superior offer over the DWS' offer.
If SMS decides to go ahead with the ASG offer, the company must first determine that it is superior to DWS' offer after consultation from external financial legal advisers. SMS must also give DWS the opportunity, but not the obligation, to put forward a counter proposal.
Shareholders were scheduled to vote to approve the DWS offer today, but the meeting was delayed last night due to the likelihood of a bid from ASG.
If the DWS merger goes ahead, it will create a company with $463.7 million in annual revenue and nearly 2000 staff.
ASG was acquired by Nomura Research Institute last year for $350 million and was subsequently delisted from the ASX. The Japanese consulting and IT solutions group is listed on the Tokyo Stock Exchange with a market capitalisation of approximately $10.2 billion as of 29 September 2016.