Micro Focus calls halt on offer talks

Marion Dakers
SHARES in IT company Micro Focus International are expected to slump today after the firm called off takeover talks after four months of discussions.

The firm said bids for the business fell short of expectations, and that it now plans to resume its share buyback programme.

The firm, which supports mainframe computer applications for companies like Tesco, said in April it was exploring options with a number of suitors, named the following month as US private equity firms Bain Capital and Advent International.

“The board set a deadline for final offers of 19 August 2011. Based on feedback now received from these parties, the board has terminated discussions and, as a result, Micro Focus is no longer in an offer period,” it said in a statement.

Earlier this month the firm posted better-than-expected first quarter results, and executive chairman Kevin Loosemore (pictured) assured investors that talks over a possible takeover were ongoing.

Last week shares in Micro Focus rose after Hewlett-Packard’s £7bn bid for Autonomy ignited investor interest in the European software industry.

Shares in Micro Focus closed Friday at 263p, valuing the business at about £520m.

The firm said it plans to restart its buyback programme, approved at its last AGM. The board has permission to buy back up to 12.3m shares under the existing scheme, worth £32.3m at Friday’s price.

The FTSE 250-listed firm added that it was reviewing its options to increase its $112m distributable reserves.