A dour trading update may have been the final blow which killed off a billion dollar takeover of former tech darling Appen just hours after takeover talks were confirmed by the AI services provider.
The Canadian tech giant which approached Appen with an indicative offer of $9.50 a share earlier this month, Telus International, told the Sydney Morning Herald and The Age that it lost interest after having a closer look at the ASX-listed group.
Richard Freudenstein said Appen has yet to receive an explanation from Telus about the abrupt withdrawal of its offer. Credit:Pat Scala
“We maintain a very healthy and robust M&A pipeline, and at any given point in time, our company is in various stages of due diligence with potential targets. We are a selective acquirer, and as such we engage in a robust evaluation of all target companies,” a Telus spokesperson said.
“In this particular case, we did look at Appen, and after an initial evaluation, made the decision to walk away from our non-binding offer.”
The provider of artificial intelligence services had only confirmed Thursday morning that its board was in talks with the Canadian company, while also releasing a trading update that flagged revenue for the year to date is below last year’s and earnings will take a hit.
Appen indicated on Friday morning that it still has not been provided an explanation for the abrupt withdrawal of Telus which had been given a confidentiality agreement to sign days earlier, which would allow Appen to look over sensitive information.
Appen makes most of its money from crowdsourcing a global workforce of a million people that do the low-level grunt work for tech giants such as Facebook, Google and Amazon. The workers teach computers to recognise basic images and speech, laying the groundwork for the development of AI solutions.Credit:Bloomberg
“Yesterday afternoon Telus sent us a letter that indicated they were revoking their offer, without providing any rationale or explanation,” Appen’s chairman Richard Freudenstein, said in a speech he was due to deliver to investors at its AGM this morning.
“We sought to reach out to Telus through their advisers but have not been able to establish contact.“
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