2U (TWOU) shares jumped 6.4% to $23.17 Friday on a report that the educational software company hired advisers for a strategic review following pressure from an activist investor who wants the company to explore a sale.
Bloomberg reported that the Lanham, Maryland-based company was working with
financial advisers to explore ways to improve its performance, including a sale.
A final decision hasn’t been made and 2U could opt to remain independent, Bloomberg reported, citing people familiar with the matter.
Activist investor Sachem Head Capital Management, which owns a 2% stake in 2U, has been pushing the company to explore a sale.
The New York-based hedge fund believes the company is the top software provider in the space and would be an attractive takeover target for private-equity firms or other education technology companies, according to Bloomberg.
The investor believes the company has seen its share price fall due to troubles
related to communications and a failure to meet its earnings forecast rather than problems with the underlying business, according to Bloomberg.
Sachem purchased a stake in education software company Instructure last year, and in December Instructure announced that it would be bought by private-equity investment firm Thoma Bravo in an all-cash deal for about $2 billion.
2U in November reported a third-quarter loss of 41 cents a share, narrower than the consensus estimate of a loss of 50 cents. Revenue totaled $153.80 million, up 43.7% from the previous year and ahead of analysts' estimates of $149.84 million.
2U has made some changes in management since revising its guidance in July, naming former Neustar Inc. executive Paul Lalljie as chief financial officer, and
appointing former SeatGeek executive Jennifer Ogden-Reese as
chief marketing officer.
2U didn't immediately return a request for comment.