Shares of New Relic (NYSE:NEWR) surged at the time of writing following its agreement to be purchased by private equity firms Francisco Partners and TPG Inc. This significant transaction involves a cash deal worth $6.5 billion, with the buying parties offering $87 per share, representing a 26% premium compared to New Relic’s share price last Friday.
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The merger’s projected closure is slated for late 2023 to early 2024. In the terms of the agreement, New Relic retains the right to seek alternative acquisition proposals during a 45-day “go-shop” period post the merger agreement’s execution. Notably, major shareholders of New Relic, including Lew Cirne, Jana Partners, and HMI Capital Management, holding roughly 20% of the company’s shares, have expressed support for the transaction. Furthermore, Lew Cirne plans to reinvest approximately 40% of his shareholdings in the context of this transaction.
A look at the past five trading days for NEWR stock highlights the level of impact today’s news had on it. Indeed, shares jumped over 13% at the time of writing. As a result, investors are now up 14.4% during this timeframe.
