The board of NZX-listed Rakon has given a wide berth to a suggestion from one of its key shareholders that the technology company be put on the block.
In a statement to the NZX, Rakon said it had received a letter dated April 28 from shareholder Mike Daniel, in which he stated he represented the views of about 14 per cent of Rakon shareholders.
The letter makes a number of comments and calls for the board to initiate a process to market the company to the international investing community.
"The board advises that neither of Rakon's substantial quoted equity security holders, the Robinson Family and Siward Crystal Technology Co Ltd, have supported this initiative," Rakon said.
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However, the statement said chairman Bruce Irvine and the board would consider matters raised by Daniel.
In his letter, Daniel said he and other shareholders believed the company was "significantly undervalued and the company is failing to highlight this value to outside investors".
"Rakon listed to take advantage of the capital markets to grow its business on a global basis, and we believe did not list to languish below asset value as it has done for a considerable period now.
"While the refreshed board [since March 2017], has no doubt been very busy ensuring good governance practice has been installed, shareholders have seen no resultant benefit.
"More importantly there is no evidence of any change in shareholder communication and disclosure, which inevitably improves investor awareness and share price performance over time.
"Unfortunately, Rakon has essentially been ex-communicated by all forms of market commentator and analysts, due to a lack of proper engagement by the company or the board."
Other companies in the same technology sector enjoyed "significantly better valuation ratings" than Rakon.
"We contend, given the long history of disappointments, it is most unlikely a bumper result from the company's enviable position in the global 5G space will change sentiment [and valuation] to any great degree," he said.
Daniels pointed to speculation in the Australian media that alluded to interest in Rakon from private equity firms.
To pre-empt a tilt from private equity, Daniels asked the board to immediately initiate a process to market the company to the international investing community.
"This process should be quickly and efficiently executed through an international tender conducted by an investment bank with the necessary credentials," he said.
Late last year, Daniels - who has a 4.2 per cent stake in the company, said he feared Rakon may disappear from the NZX.
At the time, Daniels said the market had ignored the company's potential, particularly now that it makes componentry for 5G communications networks.
"I suppose it will be another one that drifts away from the NZX because it's an unloved, unattended small cap and brokers don't follow it," he said at the time.
Daniel says it is now on the brink of a boom in 5G - network technology that offers very high internet speeds.
In Rakon's latest interim result, the company's revenue came to $56.9 million, up from $53.3m a year earlier, while its net profit fell to $1.3m from $2m.
The company said in its first-half commentary that 5G demand was starting to generate revenue.
In its most recent annual report, the company said the roll-out of 5G "continues to be our biggest opportunity and challenge".
In December, the company said it expected to achieve underlying EBITDA of between $9m and $11m for the 12 months to March 31, 2020, down from $13.3m million a year earlier.
Rakon listed on the NZX in 2006 at $1.60 and shot to $5.45 a year later.
It last traded at 24c.