Unity Software drops after rejecting AppLovin bid, ironSource shares jump (update)

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Update 11:33am: Updates shares.

Unity Software (NYSE:U) fell 5.3% after it rejected AppLovin's (NASDAQ:APP) unsolicited bid from last week and the Unity board reaffirmed its recommendation for holders to vote in favor of the ironSource (NYSE:IS) acquisition. ironSouce shares jumped 16%, while AppLovin fell 6.1%.

Unity said its board determine that the AppLovin (APP) offer is not in the best interests of its holders and would not reasonably be expected to result in a "superior proposal" to its deal with ironSource (IS), according to a statement.

“The Board continues to believe that the ironSource transaction is compelling and will deliver an opportunity to generate long-term value through the creation of a unique end-to-end platform that allows creators to develop, publish, run, monetize, and grow live games and real-time 3D content seamlessly," John Riccitiello, President and CEO of Unity said in the statement.

In connection with the ironSource (IS) deal, Unity’s (U) board authorized a 24-month share buyback program of up to $2.5 billion, effective upon closing of the merger.

Earlier Monday Citi said Unity (U) shareholders should prefer ironSource (IS) deal. Last week a Wedbush analyst also said he expected that Unity would reject the AppLovin offer as the price was "well below" Unity's intrinsic value.

Comments

[Sande traderal]

The whole offer is a scam to raise the stock price before they drop it.

U is facing difficult times and next 4 to 5 Q don't look good. Large firms needed to drop stock so they found a scapegoat Applovin to help push the price.

[Jacobin777]

@Sande traderal $U might be a good long-term entry point here. Of course, it was a better entry point 20 points ago..LOL.

[Lord TGO Investment]

Was that even an offer? No one would even know or care about AppLoving if it wasn’t because of that offer. I think this was more or less a publicity stunt.

[CAPM is good enough]

@Lord TGO Investment It was an all-stock offer too.

[Lord TGO Investment]

@CAPM is good enough exactly and didn’t want to own their crappy stock. Lol

[deadhead213]

One day doesn’t make or break $U

[Danjw2]

U price drops because they rejected the worse offer??

[Allen Greathouse]

@Danjw2 Some market participants were evidently pricing in a higher bid coming from app lovin for Unity. That didn’t happen/ fell apart. Long $U and $IS

[Lord TGO Investment]

@Allen Greathouse both are way better companies that AppLovin