Investors sold off Autodesk stock on Thursday in response to a news report that the design software firm is weighing a takeover bid for industry peer PTC.
Bloomberg reported late Wednesday that Autodesk has been working with advisors to evaluate a cash-and-stock deal for engineering software firm PTC, which has a market value of $23 billion. PTC reportedly has drawn interest from other suitors as well.
The deal would give Autodesk a 17% share of the $19 billion manufacturing software market, Bloomberg said.
On the stock market today, Autodesk stock plunged 6.9% to close at 286.11. On Wednesday, Autodesk dropped 2.4% to close at 307.27 after the news broke.
Meanwhile, PTC stock rocketed 17.7% to close at 210.47 on Wednesday. However, it pulled back on Thursday and ended the regular session down 7.6% to 194.59.
In a client note, Deutsche Bank analyst Bhavin Shah said he was surprised by news of the possible deal. That's because Autodesk executives have said they were focused on internal operations and efficiencies along with shareholder returns. Those are initiatives sought by activist shareholder Starboard Value.
Autodesk Stock On Tech Leaders List
Shah rates Autodesk stock as hold, or neutral, with a price target of 330.
Autodesk makes design software for industries such as architecture, construction, manufacturing and media.
The deal speculation comes amid consolidation in the industrial design software space. Siemens acquired Altair Engineering for $10 billion in March. And Synopsys has agreed to buy Ansys for $34 billion.
Autodesk stock is on the IBD Tech Leaders list.
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