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.
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.
