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Pushpay shareholders have likely killed a takeover offer that valued the church donations software company at $1.54 billion, the day before it was due to go to a final vote.

With almost 700,000 proxy votes cast early, the counting showed 56 per cent of investors not associated with the buyers had voted in favour of the deal - shy of the 75 per cent threshold needed for it to go ahead.

Global investment firm Sixth Street and Australian private equity firm BGH Capital launched a joint bid to buy out all other Pushpay shareholders at $1.34 a share in October last year, but significant shareholders including the Accident Compensation Corporation publicly decried the deal because it was at the bottom end of an independent assessor’s valuation range.

The bidders, which collectively owned 20.34 per cent of Pushpay through various interests, voted 100 per cent in favour of their own deal.

In total, 54 per cent of Pushpay shares on issue had voted in favour of the scheme - satisfying just one of two required criteria.

The scheme of arrangement is set to go to a vote at a meeting in Auckland on Friday morning, but the company seemingly called it early.

“As a result of the proxy votes received, absent a material change in the votes of shareholders who have already cast proxy votes, the scheme will not receive the required 75 per cent majority of the second interest class and the resolution will not pass,” Pushpay said in a market announcement on Thursday afternoon.

Shareholders could change their votes ahead of or during the meeting on Friday in person or online, the company said.

“If the Scheme is not approved by shareholders at the Scheme Meeting (which, as noted above, is Pushpay’s current expectation), Pushpay and the bidder have until 5pm on Tuesday 7 March 2023 to agree to hold another shareholder meeting.”

If no meeting was called, Pushpay or the bidders could terminate the deal and it would remain listed on the New Zealand Stock Exchange and Australian Stock Exchange.

Pushpay shares were priced at $1.28 when it entered a trading halt on Wednesday, ahead of the announcement.

The bidder's $1.34 a share offer valued Pushpay at $1.54 billion.

Last week, ANZ Investments, Nikko Asset Management and the New Zealand Shareholders Association, all took a stand against the offer.

ACC had been an investor in Pushpay since its listing on the NZX and currently owned 6.2 per cent of the total shares on issue.

“ACC believes the bid price undervalues Pushpay and notes that it only just falls within the Independent Adviser’s valuation range,” a spokesman said.

Earlier this month, Grant Samuel & Associates, an adviser appointed by Pushpay to assess the offer,  in the range of $1.33 to $1.53 per share.

Some shareholders expressed outrage when the board recommended the offer, saying it undervalued the company.

The acquisition price was 16.7 times underlying earnings, based on the midpoint of Pushpay’s guidance of US$56 million (NZ$86m) in the 2023 financial year.

“There are emerging opportunities for the company to serve new markets, like the North American Catholic market, that are already beginning to show good momentum,” Nikko head of New Zealand equities Stuart Williams said.

“Currently sitting at around 55 per cent of total church giving, we see digital payment as having room for significant growth, ultimately to closer to a 100 per cent market share.”

ANZ Investments head of Australasian equities Craig Brown said the offer was opportunistic and did not reflect the attractive growth potential of Pushpay.

“Pushpay’s market-leading suite of church software is well placed to benefit from the ongoing digitisation of church management services and donations,” Brown said.

“We consider the Independent Adviser’s assumption that Pushpay will achieve earnings growth of just 2.5 per cent per annum beyond 2027 as conservative.”

ANZ Investments owns 2.7 per cent of the total shares in Pushpay.