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Investing.com -- Shares of Telus International (TSX:TIXT) surged more than 26% on Thursday after receiving an unsolicited acquisition proposal from majority owner Telus Corp (TSX:T). The Canadian telecom giant offered $3.40 per share in cash for the remaining equity it does not already own in the digital services provider.
Telus Corp currently holds 57.4% of Telus International’s total outstanding shares and close to 87% of all voting rights. Following the announcement, Telus Corp’s own shares edged up 0.7% in American trading.
The acquisition is subject to several conditions, including due diligence, negotiation of definitive agreements, and regulatory clearances in Canada and the U.S. Telus International emphasized that no binding agreement has been signed and that there is no guarantee the transaction will be finalized. A special committee of independent directors will be formed to review and assess the proposal, according to the company.
"Given the structural challenges and uncertain demand backdrop, along with the preexisting partnership and ownership of Telus Corp, we expect the proposed acquisition to close without many hurdles," said Maggie Nolan, an analyst at William Blair. She maintained a Market Perform rating on the stock, adding, "The macroeconomic backdrop has pressured growth prospects in the near term, and we expect that Telus Digital’s margins will remain under pressure due to challenges with the recent cost optimization initiatives, pricing pressure from competitive forces, and a mix shift into more AI-related solutions."
Management at Telus Corp. sees the transaction as a strategic maneuver that could align digital strategy and capital allocation across the broader Telus ecosystem. The company aims to integrate Telus Digital’s capabilities to strengthen initiatives across its telecom, healthcare, and agricultural units.
While the offer reaffirms Telus Corp’s commitment to accelerating digital innovation and operational synergy, governance processes related to shareholder fairness are expected to play a pivotal role. Telus International reiterated that all strategic alternatives remain under consideration.