Australian software firm Appen has received a proposal from US-based digital data solutions firm Innodata for a potential merger in an all-stock deal.
Appen said the proposal offers $0.70 worth of Innodata shares per share of the company, which “represents a premium in excess of 100 percent to its share price at the time the indicative proposal was provided”.
It, however, refused to provide the actual offer value or date the proposal was made, citing confidentiality.
The offer comes as Appen, one of the world’s largest artificial intelligence training providers, engaged in multiple cost-cutting measures amid weak demand, as high inflation and interest rates resulted in spending cuts by global tech giants.
The company, considered an analyst favourite in Australia due to its high-profile customer base, lost 97 percent of its share value between 2021 and 2023.
Innodata did not immediately reply to a Reuters request for further details on the deal.
Appen shares soared as much as 40 percent, before trading was halted pending a query by the exchange on the unusual share movement.
The IT firm disclosed the proposal in its reply, and said it was seeking to understand the potential value the proposed bid implied for its shareholders.
“The Appen board has agreed to a limited exchange of non-public information on both businesses to occur, on a non-exclusive basis,” it added.
Innodata is one of the several parties who have proposed transactions via strategic investments, or sale of part or all of Appen’s businesses, the company said.
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