Shares in British software company Sopheon soared yesterday as it looked set to be bought for £115m by a company backed by US private equity.
The AIM-listed company rose 87.8 percent, or 430 cents, to 920 cents after agreeing to a potential cash offer worth 1,000 cents per share, which is a 104 percent premium to the closing price of Monday from 490 cents.
The bid was submitted by Chicago-based Wellspring, which is backed and controlled by private equity group Resurgens.
A formal offer has yet to be made, but it is expected that this will happen.
Sopheon said the proposal “offers an attractive valuation” and “provides an attractive liquidity opportunity not currently offered by the public markets.”
Sopheon soared 87.8% after agreeing a potential cash offer worth 1,000p per share, a 104% premium to Monday’s closing price of 490p
Two shareholders who own almost 40 percent of the group have supported the offer.
Sopheon helps companies take their products and services from ideas to commercial delivery.
The software has been used by consumer goods giant The Hershey Company, among others.
If a bid is made, it will revive fears about the pace at which British companies are being swallowed up by private equity firms.
In September, buyout giant Permira agreed to acquire pharmaceutical services group Ergomed for £703.1 million.
And two weeks ago, Apax Partners bought technology consultancy Kin and Carta for £203 million.
But shares in another buyout target were well below the offer price amid doubts over whether the deal would go through.
Investors will vote tomorrow on French private equity firm Archimed’s proposed £191 million takeover of life sciences group Instem.
Instem remained flat at 765p, a far cry from Archimed’s offer of 833p per share. It has said it needs the takeover to survive.
The FTSE 100 fell 0.1 percent, or 5.67 points, to 7,321.72, while the FTSE 250 rose 0.4 percent, or 65.46 points, to 17,083.05.
The blue-chip index fell 4 percent last month due to dismal results from companies such as NatWest and Standard Chartered, and conflict in the Middle East.
London’s mid-cap index has suffered even heavier losses, falling 7 percent in October.
CAB Payments rose 11.9 percent, or 6.5 cents, to 61.2 cents, to pare some of its losses a week after falling 72 percent following a sharp cut in its outlook .
Rolls-Royce reached the top of the FTSE 100 as the city remained optimistic about the jet engine maker’s fortunes.
Analysts at Barclays upgraded their rating on the stock from ‘neutral’ to ‘overweight’ and lifted the share price from 239p to 270p.
Although the stock has fallen by almost a tenth in the past month, Barclays points out that this ‘presents a buying opportunity’.
The shares, which have more than doubled in value this year, rose 6.6 per cent, or 13.4p, to 215.4p.
Drinks bottler Coca-Cola maintained its forecast that annual sales will grow by at least 15% this year, but fell 0.5%, or 10p, to 2132p.
GSK rose 0.3 percent, or 5p, to 1,457.4p and will pay almost £820 million for the exclusive rights to develop and commercialize Johnson & Johnson’s hepatitis B therapy.
The world’s largest interdealer broker TP ICAP fell 4.7 percent, or 7.8p, to 157.1p, after revenues in its core global business fell 6 percent in the three months to the end of September.
And Elementis, the chemicals group that makes the ingredients for deodorants and skin creams, insisted it was on track to meet expectations for this year, even as sales fell 5 percent in the three months to September 30.
Shares rose 5.3 percent, or 6p, to 118.4p.