Smartsheet: Shareholders Should Await Improved Offer After Blackstone and Vista Equity Partners Bid

Narrow-moat Smartsheet has received a go-private offer from Blackstone and Vista Equity Partners for $56.50 per share in a cash transaction valued at $8.4 billion. The announcement arrives following reports from Reuters regarding a potential bid, which we addressed in our Sept. 20 note. The takeover offer is subject to a shareholder vote and represents a 41% premium to Smartsheet's 90-day weighted average share price to July 17, but a 6% discount to our intrinsic valuation. Smartsheet has until Nov. 8 to solicit alternate proposals, and we recommend shareholders vote against this initial offer and hold out for a more attractive bid and takeover premium. Accordingly, we maintain our $60 per share standalone fair value estimate.