Industry News

Instructure Deal Off — For Now

• By Dian Schaffhauser
• 02/13/20

Instructure's pending acquisition by venture capital company Thoma Bravo appears to have bitten the dust. Instructure produces the popular learning management system Canvas. According to reporting by Bloomberg, shareholders rejected the deal, which originally would have paid $47.60 a share. A day before the vote, the offer was raised to $48.50, a $0.90 increase.

However, in an apparent show of acquiescence to shareholder sentiment, Instructure said in a regulatory filing that it was choosing not to accept the higher bid. After a special meeting convened on Feb. 12, the board filed a proxy statement with the Securities and Exchange Commission, expressing "concern about whether the revised proposal provided stockholders with sufficient certainty of closing in light of the feedback concerning the merger that the board has received from over 20 stockholders since the execution of the merger agreement." The voting deadline was also moved out a day, from Feb. 13 to Feb. 14.

Now, Thoma Bravo will need to decide whether to walk away from the deal altogether or increase its bid once again.

Numerous investors expressed reservations about the sales process and the price. Bloomberg reported that shareholders representing a third of the investor base had stated that they planned to vote against the acquisition. And two shareholder advisory companies — Institutional Shareholder Services and Glass Lewis & Co. — recommended that their investors vote against the deal.

In earlier comments Instructure executives said they had spent months dealing with possible buyers and that the offer from Thoma Bravo was the best it had received. Last week, the company disclosed in an SEC filing that one "strategic party" had given a verbal offer of $54 to $57 per share, but that no formal offer had been delivered.