Instructure downgraded to hold from buy at SunTrust RH

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Instructure’s stock falls as Thoma Bravo’s buyout bid represents a 10% discount

Shares of Instructure Inc. sank 9.2% in premarket trading Wednesday, after the learning and development applications company announced an agreement to be acquired at a discount by private-equity firm Thoma Bravo LLC in a cash deal valued at about $2 billion. Under terms of the deal, Instructure shareholders will receive $47.60 in cash for each Instructure share they own, which is 10.1% below Tuesday’s closing price of $52.96. The stock had gained 5% since the company announced on Nov. 14 that it was reviewing strategic alternatives after receiving “interest” from multiple third parties, and has rallied 25% since Oct. 28, when the company reported third-quarter results and said it was engaging in a strategic review of its Bridge business. In comparison, the S&P 500 has gained 1.8% since Oct. 28. The Thoma Bravo buyout deal includes a 35-day “go shop” period, in which the company can solicit alternative merger proposals.

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