Autonomy builds a £500m war chest for acquisitions

AUTONOMY was back on the acquisition trail yesterday, raising £500m in a convertible bond issue to snap up a target in the US.

Chief executive Mike Lynch said: “We’ve got our eye on a couple of potential targets, but we need to get the cash before we can start having proper conversations.”

He said Autonomy would buy a firm that would allow it to push its software into a new market
Autonomy specialises in software that can spot patterns in emails, telephone calls and other documents.

Shares in the firm closed 5.5 per cent lower at 1522p, mainly due to dilution fears.

Some were disappointed that the bond was issued on the Professional Securities Market, meaning that retail investors could not take part in the offering.

“This is all about the vested interests of the bond market, which wants to keep retail investors out,” said Paul Killik of stockbroker Killik & Co.

The bonds, which mature in five years, will be convertible into ordinary shares and will carry a semi-annual coupon of 3.25 per cent a year with an initial conversion price of £20.6334.

MORGAN Stanley acted as the global coordinator and sole bookrunner for the bond offering. Taking the lead was Christian Lucas – one of the tech sector’s biggest-hitting advisers. Lucas became a managing director at the bank in February 2009. Prior to that he was head of the technology investment banking group since 2004. He has worked on numerous big deals, including the privatisations of France Telecom and Portugal Telecom. Fluent in English, French, Spanish and Portuguese, Lucas graduated with a BA from Assas Law School in Paris in 1992, before taking an MBA at Harvard Business School in 1996.