Ann: FY24 Full Year Results Announcement, page-46

Feb 25, 2024 – 7.19pm

Nothing lights up Street Talk’s radar like a company getting its defence strategy in order.

As Altium prepares to decamp from the ASX after snagging a $9.1 billion scheme bid from Japanese semiconductor player Renesas Electronics, the fund manager brigade has been scrambling to pick the next M&A target in the sector.

Enter cloud connectivity provider Megaport, capitalised at $2.2 billion and a hot favourite among daytraders and short sellers. The stock is trading at about 10-times revenue, while Altium was tracking at 18-times when Renesas came calling.

Megaport’s billionaire founder Bevan Slattery. Paul Harris

But its chairman Bevan Slattery’s decision to step down from the board by the end of the 2024 financial year that has got investors talking. Slattery, who founded Megaport more than a decade ago, held 6.1 million shares or about 4 per cent of the company, according to his most recent director interest filing from November 23. Now he’s off the board, prospective suitors may find prising a below-substantial stake away from ‘Bevdawg’ somewhat easier.

It comes as sources close to Megaport told this column Bank of America would be in-and-around the situation should the interest materialise into a formal approach. Megaport shares have gained 52.6 per cent year-to-date, up 154 per cent over the past 12 months. Quarterly revenue increased 5 per cent to $48.6 million.

Megaport boss Michael Reid is well-liked among investors, thanks to his track record of delivering circa 2.4-times growth in recurring revenue for network giant Cisco’s ThousandEyes, a software platform that monitors network infrastructure and troubleshoots application delivery