- Unity Software(U) rejectedAppLovin's(APP) bid to buy out Unity.
- Additionally,ironSource(IS) reaffirmed its willingness to merge with Unity Software.
- Unity stock slid 7% soon after today's opening bell.
It seems that there’s a soap opera going on betweenUnity Software(NYSE:U),AppLovin(NASDAQ:APP) and ironSource(NYSE:IS). Last week, AppLovinbid to buy outUnity Software. Then, this morning, it was revealed that Unityrejected AppLovin’s buyout bid. Also, ironSourcereaffirmed its commitmentto merge with Unity, a transaction that hasn’t actually happened but could be more likely now. In the wake of all this drama, Unity stock slumped 7% in early trading today.
Obviously, there’s a lot to unpack here. First of all, the business models of AppLovin and ironSource are somewhat similar. After all, they both focus on helping developers market and commercialize their apps. Unity’s business model is different, as the company is primarily a 3D-content platform.
It might seem that both AppLovin and ironSource could be a good fit for a business combination with Unity Software. However, Unity’s board of directors doesn’t seem to see the synergy with AppLovin. Just recently, Unity Software rejected AppLovin’s all-stock takeover proposal. This would have had an enterprise value of $20 billion.
What’s Happening With Unity Stock?
This development apparently isn’t sitting well with Unity’s shareholders today. By 10:30 a.m. Eastern, the Unity stock price already fell 7% and touched the $54 level.
This doesn’t necessarily mean that Unity Software won’t still be a takeover target. In a fresh press release, ironSource commented on Unity’s rejection of AppLovin’s buyout proposal. Specifically, ironSource “strongly reaffirmed its commitment to a merger with ironSource.”
This merger hasn’t actually taken place, and there’s no guarantee that it will happen. Still, Unity’s rejection of AppLovin’s offer seems to leave the door open for ironSource to make a merger deal with Unity Software.
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