Potentia hints at sweetened bid for Australia's Nitro as bidding war heats up

Australia's Nitro Software (NTO.AX) said on Tuesday private equity firm Potentia Capital had indicated it may be in a position to beef up its takeover offer to gain due diligence, a move aimed at outbidding rival buyer, KKR Inc-backed Alludo.

Potentia, which owns a 19.3% stake in Nitro, could hike its offer to A$2.20-A$2.30 per share from the current A$2.0 apiece bid, subject to successful due diligence, Nitro said.

The development comes days after Nitro's shareholders rejected a A$526.9 million ($362.77 million) scheme by Alludo, following which it launched an off-market takeover offer last week.

Alludo and Potentia Capital have been involved in a bidding war for Nitro since October last year, as high inflation and weak consumer demand have made technology firms potential buyout targets.

Nitro also warned on Tuesday that providing due diligence access to Potentia could adversely impact acceptances of Alludo's takeover offer and the ability to meet the 50.1% minimum voting condition.

The e-PDF and e-signature software signing firm reiterated its recommendation for the A$2.15/share Alludo offer and said there was no "tangible evidence" that Potentia had secured funds from external sources to raise its bid.

The due diligence could be completed within three weeks, Potentia has told Nitro.

Potentia and Alludo did not immediately respond to Reuters' requests for comment.

($1 = 1.4524 Australian dollars)