Another British tech company is to be bought by a rival across the Atlantic after Micro Focus accepted a takeover offer from Canada’s OpenText.
It is offering £5.32 per share, valuing the British IT group at $6bn (£5.1bn), including debt. It is a 98pc premium on Micro Focus’s current share price, which has plummeted 87pc over the past three years.
The FTSE 250 group, which provides services for business IT, never recovered from significant profit warnings in 2018 and 2019.
Nasdaq-listed OpenText is one of the world’s largest software providers and is used by thousands of corporate clients. It is valued at $13bn and has 14,800 employees in 35 countries.
If the combination goes ahead, the pair will target a market worth $170bn.
Greg Lock, chairman of Micro Focus, said: “The premium offered demonstrates the significant progress we have made transforming the business.
“OpenText not only shares our values but will offer new opportunities for both our customers and employees.”
OpenText boss Mark J. Barrenechea said: “Upon completion of the acquisition, OpenText will be one of the world’s largest software and cloud businesses with a tremendous marquee customer base, global scale and comprehensive go-to-market.
“Customers of OpenText and Micro Focus will benefit from a partner that can even more effectively help them accelerate their digital transformation efforts by unlocking the full value of their information assets and core systems.”
Micro Focus has been reeling from an $8.8bn acquisition of the software segment of Hewlett Packard Enterprise (HPE) in 2017, which it has been struggling to integrate ever since.
It issued various profit warnings including one earlier this year, as revenue continued to decline for a couple of years.
In the six months to April 30, revenue dropped 7pc to $1.3bn, while the company swung to a $35m profit from a $155m in the same period the year before.
It comes as overseas rivals have been sniffing at UK tech names.
Last week cybersecurity company Darktrace confirmed it had been approached by suitor Thoma Bravo, a US private equity firm.
Meanwhile Schneider is mulling over a buyout of minority shareholders in software group Aveva. The French industrial conglomerate has a 60pc stake in the Cambridge-based firm.
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