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Activist investor Engine Capital is calling for Avantax (NASDAQ:AVTA) to start exploring alternatives, including a potential sale. Avantax ticked up 0.1%.
Engine Capital LP, which owns approximately 2% of the outstanding shares of Avantax (AVTA), argues that the company could fetch between $27 and $32 per share, or a 34% premium, in a potential sale, according to a letter the investor sent to Avantax’s board on Monday. Engine Capital is requesting a meeting with the company’s board.
“We are aware of the discussions management and the Board have had with several parties over the last year regarding a potential sale of Avantax,” Engine Capital’s Managing Partner Arnaud Ajdler wrote in the letter. “Unfortunately, none of these discussions were in the context of a formal process, so these potential buyers were not compelled to put their best offer forward or felt the sense of urgency that a competitive auction would create.”
The Engine Capital letter comes after Avantax, formerly known as Blucora, agreed in November to sell its TaxAct tax software business to an affiliate of Cinven for $720 million in cash.
In late January, Avantax (AVTA) launched a $250 million modified Dutch auction tender offer at a price per share not less than $27.00 and not greater than $31.00.
Engine Capital is not new to Avantax (AVTA). In late February, Avantax said it received notice that Engine Capital withdrew its nomination for a board candidate for the 2023 annual meeting after the activist nominated a candidate in January.
