Key Highlights

  • Solidion declared its proposal to acquire Flux Power "best and final" after Flux's board rejected it.
  • Solidion's own shares were roughly flat while Flux Power fell sharply.
  • Flux Power faces financial pressure, including a Nasdaq listing deficiency and a capital-raise requirement.
  • The standoff played out on a day full of other corporate deal news across the market.

Solidion Technology held its ground on Monday, Oct. 5, declaring its Takeover proposal for Flux Power "best and final" after Flux's board rejected it, and Solidion's own shares barely moved.

A Take-It-or-Leave-It Stance

Solidion Technology (NASDAQ:STI) drew attention on the Nasdaq Composite on Monday after it said it would not raise its proposal to acquire battery maker Flux Power Holdings. Solidion called its offer "best and final" after Flux Power's board unanimously rejected it on Friday.

Solidion's stock was essentially flat, edging slightly lower to about $5.30. The bigger move came in the target. Flux Power (NASDAQ:FLUX) fell sharply to about $0.54, though reports differed on the size of the decline.

Solidion chief executive Jaymes Winters said in a company statement that the proposal "already accounts for the Capital and execution needed to stabilize Flux Power."

Why Flux Said No

Flux Power's board, in rejecting the approach, pointed to its own plans. The board cited lower costs, improved operating efficiency, expanded OEM relationships and new growth initiatives.

The two sides now appear far apart. Solidion is signalling it will not sweeten terms, while Flux's board has said it prefers its own path.

Flux faces financial pressure. The company has about $300,000 in cash, has a Nasdaq deficiency because its share price has been below the $1 minimum bid requirement, and faces a requirement under its Credit agreement to raise $4 million within 50 days. Those facts frame the debate over whether Solidion's proposal or Flux's standalone plan is the better route, and the outcome is not yet known.

Both companies are micro-caps, and their shares can swing sharply on thin trading.

A Busy Day for Deals

The Solidion standoff played out on a day full of corporate deal news. Schneider Electric (OTC:SBGSY) agreed to buy PTC (NASDAQ:PTC) for $205 a share in cash, sending PTC soaring and making it the top S&P 500 gainer. C.H. Robinson Worldwide (NASDAQ:CHRW) agreed to acquire truck broker RXO (NYSE:RXO) in a deal valued at about $5.8 billion, and Cenovus Energy (NYSE:CVE) agreed to buy Athabasca Oil (OTC:ATHOF). At the small end, Fathom Holdings (NASDAQ:FTHM) and Neighborhood Intelligence called off their planned merger, citing disagreements over valuation.

The Nasdaq Composite rose 286.45 points to a record 27,477.31, while the Nasdaq-100 hit a record at 31,076.44. The S&P 500 gained 51.23 points to 7,773.95, just shy of its record, and the Dow added 90.94 points to 51,267.90. The Russell 2000 rose 14.24 points to 2,847.14.

Gains were concentrated in mega-cap AI names such as Nvidia (NASDAQ:NVDA), which closed at a record, a reminder that many smaller stocks are struggling.

Rates were part of the reason. The 10-year Treasury Yield climbed to its highest level since 2002, even after a weak September jobs report showed payrolls rising by only 29,000. The soft data cut bets on an October Fed hike, but the ISM services survey showed prices paid at their highest since July 2022.

What to Watch Next

The next steps rest with the two boards. Investors will watch for any response from Flux Power to Solidion's "best and final" stance, and for progress on Flux's requirement to raise $4 million within 50 days under its credit agreement. Any change in either company's position could move both stocks.

On the macro side, the Fed's September meeting minutes arrive Wednesday, Oct. 7, at 2 p.m. ET, with PepsiCo (NASDAQ:PEP) reporting Thursday, Delta Air Lines (NYSE:DAL) Friday, and banks from Oct. 13. The Fed meets again Oct. 27-28.