XP Power: What’s Next?

Advanced Energy Industries has decided to withdraw its hostile bid for XP Power, a move that comes after the latest $571 million offer was rejected by XP Power's board on 13 May 2024. As a result of this decision, Advanced Energy will be prohibited from making any further bid for XP Power for the next six months.

Following the failed takeover attempt, investor BlackRock has started loaning out stock, indicating that there are short positions in the market anticipating a decline in XP Power's share price. This is a common occurrence after a company experiences a thwarted acquisition bid.

Meanwhile, Sequans, another player in the industry, has announced cuts to its research and development efforts as part of its strategy to recover from a failed takeover bid. The competitive landscape in the sector is clearly shifting as companies reassess their positions and strategies in light of recent developments.

The XP Power board has stated that Advanced Energy has not made any contact since the rejection of its bid. In a statement, XP Power mentioned that Advanced Energy's failure to meet the board's expectations in terms of value has hindered progress in the negotiations. Without access to the necessary due diligence, Advanced Energy was unable to solidify its offer.

Under the Singapore Takeover Code regulations, Advanced Energy is now restricted from making any offer or taking certain actions related to XP Power for the next six months. Despite these developments, XP Power remains confident in its full-year trading expectations, which are set to be announced during the Interim Results presentation on 6 August 2024.