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November 11, 2016

Fitbit denies takeover bid rumours

Fitbit says it has not received any bid offers from ABM Capital.

By Hannah Williams

Fitbit has been forced to deny rumours of a takeover following a regulatory announcement purporting to describe a $2.8bn offer for the company.

The US Securities and Exchange Commission filing, made by ABM Capital, said that the Chinese fund had written a letter to the fitness tracker maker offering to buy all outstanding shares for $12.50 each.

As Fitbit’s shares rose by more than 5% off the back of the filing, the company was forced to deny the takeover offer and said that no such letter had ever been received. In a statement, Fitbit said:

“Fitbit has not received any communication from ABM Capital, or any other firm, regarding a reported offer. As the leader in the connected health and fitness market, we remain focused on delivering innovative products consumers love and are confident in our vision for the future”.

In what was shaping up to be somewhat of a mystery, efforts by press to contact ABM Capital were met with disconnected phone lines and addresses which led to residential properties.

According to Business Insider, the address listed in the SEC filing appeared to be a shared office space with the number being listed to the chief financial officer, Kevin Mead. Business insider said they could not confirm whether Mead was of any connection to ABM and SRI and could not be reached for comment.

Last week, Fitbit’s shares were down by over 30 percent after the company reported its its third-quarter earnings, which saw missed sales and a cut in its full-year earnings forecast.

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The company reported revenue of $504 million, with a revenue increase of 23 percent year-over-year.

fitbit-banner-mobileIt recently released two new wearable fitness trackers, Charge 2 and Flex 2.

James Park, Fitbit co-founder and CEO said: “We continue to grow and are profitable, however not at the pace previously expected. We are focused on improving the utility of our products and integrating more and deeply into the healthcare ecosystem and believe we can leverage our brand and community to unlock new avenues and adjacencies of growth.”

 

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