14th Oct 2014 13:23
LONDON (Alliance News) - Shares in Allocate Software rose 34% Tuesday after its board recommended a GBP109.6 million takeover offer from private equity firm HgCapital Group.
The 153.33 pence a share cash offer was made through a recently incorporated company formed to make acquisitions on behalf of the HgCapital Funds, part of HgCapital Group. The price is 35% above Allocate's closing price of 113.5 pence Monday, and Allocate shares were up 34% at 152.00 pence Tuesday afternoon.
The acquisition is subject to approval from shareholders at the company's annual general meeting to be held November 27. HgCapital's vehicle, Acorn Bidco, said Tuesday afternoon it has received acceptances for around 56% of Allocate's issued share capital. It needs at least 75% approval to pass.
Allocate's board said that it considers the acquisition price to represent a "full and fair value to shareholders, providing certainty through the opportunity to realise value now for their current holdings in cash."
It added that it considers the deal to be in the "best interests of the company as a whole and believe it represents a sound means of securing the long-term strategic potential of Allocate at a time when political change and a peak in product renewal cycles introduce new challenges to growth."
Allocate shareholders will receive the final dividend of 1.45 pence per share upon approval at the annual general meeting, it said.
"Whilst we remain confident of our prospects for the next financial year, and in the fundamental strength of the business, we firmly believe that this transaction is today in the best interests of all Allocate stakeholders, including shareholders, employees and customers," said Allocate Chairman Terry Osborne in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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