14th Oct 2014 06:49
LONDON (Alliance News) - The board of Allocate Software PLC said Tuesday has recommended a takeover offer from Acorn Bidco Ltd that would value the company at around GBP109.6 million.
Bidco is a recently incorporated company formed to make acquisitions on behalf of the HgCapital Funds, part of HgCapital Group.
Bidco has made an offer at 153.55 pence per share, which it said is a 35.3% increase on Allocate's closing price of 113.5 pence Monday.
The acquisition is subject to approval from shareholders at the company's annual general meeting; Bidco said it has received acceptances for around 47.1% 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 Chairman Terry Osborne in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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