Darktrace shares up for second day in a row on takeover tussle hopes

Darktrace’s shares jumped for the second day in a row on hopes of rival bidders joining the race to buy the British cybersecurity firm.

They rose 4.9 per cent, or 25.4p, to 540.6p, giving it a value of £3.86billion, after US software companies including Cisco, Palo Alto Networks and CrowdStrike were tipped as potential bidders for the Cambridge firm.

It is understood the three are ‘monitoring developments’ and investors are anticipating a ‘full-scale bidding war’.

Darktrace, which is being advised by Lazard and Jefferies, is in discussions with private equity firms including Thoma Bravo about a cash offer. 

Thoma Bravo has until September 12 to make an offer or walk away.

 But advisers have warned any buyer would have to be comfortable about Darktrace’s connection to founder Mike Lynch, who still holds a 4.3 per cent stake, worth £158million, before making a bid.

Lynch, 57, is fighting criminal fraud charges related to Hewlett-Packard’s £9bn purchase of Autonomy, the software firm he co-founded in 2011.

HP claims it used accounting tricks to inflate its value prior to the sale. In the months leading up to Darktrace’s IPO last year, a number of US banks refused to participate due to the legal implications of the case, an adviser pointed out, saying buyers could have similar concerns.

Darktrace was largely built by ex-Autonomy staff, including current chief executive Poppy Gustafsson.

A deal is likely to be scrutinised by ministers using the National Security and Investment Act, allowing them to intervene on national security grounds.

Thoma Bravo has experience in the cyber security sector, having bought UK-based Sophos. Darktrace floated in April 2021 at 250p and hit a high of 945p in October.