Another interesting twist in the tale with the founding CEO back on deck as an "independent consultant".

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The Board of leading transport telematics company, EROAD, today announced it has appointed former founding EROAD CEO Steven Newman as an independent consultant to its Technology Board Committee.

The Board members of EROAD’s Technology Committee are Barry Einsig as Chair, Sara Gifford, and Selwyn Pellett. Steven stepped down as the EROAD CEO in April 2022 and retains a significant shareholding interest (12%) in the business. Steven is returning to consult to the Technology Committee, which will help guide the technology underpinning of EROAD’s new strategy. EROAD Chair Susan Paterson explained, “As communicated in recent market and shareholder updates, EROAD is focused on the execution of its new strategy and is making compelling progress to reposition the business and accelerate growth in all our markets.” “Ongoing investment in technology enhancements will be an important strategic component. Steven Is bringing his skills and experience to our Technology Committee to help guide that strategic investment and ensure it delivers.”

Mark Heine, EROAD CEO, said, “As a business with technology at our core, it makes strategic sense for our Technology Committee to involve Steven. It's also personally pleasing to be able to welcome Steven back to the EROAD business. He brings with him a deep knowledge of EROAD, and the technologies needed to meet our diverse customers’ needs.”

Steven said “I’m excited by the opportunity to contribute once again to a great New Zealand technology business. My role will be to assist the Technology Committee on its Charter and with the technology requirements and dependencies for delivering on customer needs.”

The Technology Committee has a Charter to focus on assisting the Board with oversight of: • Product management,technology and innovation strategies; • Plans and operations related to hardware, product and platform innovation; • Information security, cybersecurity, data privacy and third-party technology risk management; • Key product and ecosystem partners, and significant investments in support of new or existing customers and internal systems. The appointment of Steven to the Technology Committee has been in discussion for several months and predates the Volaris NBIO. Authorised for release to the NZX and ASX by the Chair of the EROAD Board.

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Not sure if this development sends the signal that unless any takeover offers are in "too good to refuse" territory, the business would like to continue operating as a standalone entity and pursue its growth strategy. Of course, the update does say this pre-dates the bid.

ERD shares have come out of the trading halt after the board meeting, and the board has knocked it back.

Here is the full text of the letter sent to Volaris -

725 Ann Street Fortitude Valley Queensland 4006 Australia

Attention: Troy O’Connor, Portfolio Manager Volaris Group

12 July 2023

RESPONSE TO NON-BINDING PROPOSAL FOR THE ACQUISITION OF EROAD LIMITED

Dear Troy, On behalf of the EROAD Limited (“EROAD”) Board, we thank you for the confidential, indicative, nonbinding and incomplete proposal to acquire all of the shares in EROAD, which you would prefer to implement through a scheme of arrangement (the “Proposal”) dated 22 June 2023.

We would also like to take this opportunity to welcome Volaris Group as a shareholder, and we look forward to your support as we continue to deliver on EROAD’s strategy. We note that under the Proposal, you have offered EROAD shareholders NZ$1.30 per share in cash consideration which implies an EV / FY24 revenue (guidance) of c.1.2x. The Board of EROAD has established a Sub-Committee, who have met on several occasions and carefully considered the Proposal along with Goldman Sachs as our financial adviser and Chapman Tripp as our external legal counsel. The Board appreciates there are strategic benefits that EROAD could offer to your portfolio, including the attractive long-term growth prospects.

After careful consideration, the Board has determined that the Proposal materially undervalues EROAD’s business. The Proposal therefore falls below the level at which the Board would be prepared to grant access to due diligence information, or to engage in negotiations on a scheme implementation agreement.

The Board remains committed to value maximisation and acting in the best interests of EROAD and our shareholders. We look forward to engaging with you as one of EROAD’s substantial shareholders.

Yours sincerely,

Susan Paterson Chair,

EROAD Limited

NZSA is recommending a partial takeover.

Interesting perspective here, though it still seems like a less probable outcome - https://www.nzshareholders.co.nz/scrip-article/eroad-could-a-partial-takeover-offer-be-the-best-outcome-for-all/

It is giving me pause for thought though. Thoughts, others?