NZSA chief executive Oliver Mander said there was no obligation to share the rationale behind the “massive valuation gap”.

He speculated it could be that the bidder thought it could realise synergies from Rakon’s technologies, given it was in the same industry – but for reasons of commercial sensitivity, those reasons would be kept under wraps.

More, he said the 160% premium could have been something of a mirage.

It was never a given. There was never a formal $1.70 per share offer (valuing Rakon at $391m; shares were 60c ahead of the offer, and shot up to $1.31 during talks, then gradually sunk back down as prospects dwindled).

They closed on Friday at 70c. The stock is still way below its 2022 high of $2.22, which itself was only a third of its all-time high.

“The headline number, $1.70, might look great,” Daniel said.

But for his organisation, the “indicative” in non-binding indicative offer is very much the operative word.

“It’s essentially an expression of interest. There’s a lot of water that has to flow under the bridge before it gets anywhere near the point of being an offer.”

An offer could be lower after due diligence. It could also be highly conditional.

Fielding an NBIO was always a complex process.

In this case, it was especially fraught because progressing to due diligence raised the prospect of sharing sensitive information with a competitor, Daniel said.

Rakon did not identify the bidder at any point, but Australian media named it as Nasdaq-listed chip maker Skyworks.

With lawyers and advisers, an NBIO process could be expected to cost millions. “Maybe it’s just the price that shareholders have to pay for interest in their company.”

But should the bidder reimburse costs? Daniel said the NZSA shared his frustration and favours reimbursement clauses, but the provision is rare for a deal that doesn’t progress beyond the NBIO stage.

When the bid for Rakon was first disclosed in December, Mander compared the offer to the unsolicited, non-binding offer for Eroad (also ultimately snubbed).

“I wouldn’t use the word ‘opportunistic’, but it’s clear that global markets, including New Zealand, are at the bottom of a valuation cycle, and that makes the offer look quite strong in terms of the raw share price,” Mander said.

“Investors with deep pockets and long time horizons are in a great position to take advantage of the current cycle.”

The NZSA head reiterated that theme today, saying “Rakon is not the only company on the NZX at the moment that looks very oversold.”

Rakon revealed the NBIO offer on December 18 last year, and said in a June 19 filing the processes had ended.

“The parties were unable to reach a suitable resolution to the potential complexities encountered during due diligence,” chairwoman Lorraine Witten said.

Witten said the outlook for Rakon’s longer-term markets was strong and the opportunities significant, especially in the global space and artificial intelligence sectors.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.