Software firm Altium has knocked back a $5.05 billion takeover proposal.

IT giant Autodesk had bid to buy out Altium, but the company rejected it on the basis that it undervalued its business.

Altium said in a stock exchange announcement that its board appreciated the interest.

Altium largely designs software systems for manufacturing circuit boards and other electronic equipment. 

US-based Autodesk is one of the world’s largest CAD/CAM software companies, valued at $US62 billion ($80 billion).

“Altium’s strong track record of setting ambitious long-term goals and achieving them gives the Altium Board confidence in the company’s ability to pursue its transformative strategy and achieve its 2025 financial goals,” Altium chairman Samuel Weiss wrote.

“Having now successfully pivoted to the cloud, Altium is now well positioned to pursue market dominance and industry transformation. 

“The adoption of Altium’s cloud platform is transforming Altium’s business model from maintenance-based subscription to capability-based SaaS subscription.”