Micro Focus Raises Borland Offer To $1.50 A Share
July 01 2009 - 4:43AM
Dow Jones News
Business software company Micro Focus International PLC
(MCRO.LN) Wednesday said it had raised its offer for Texas,
U.S.-based software company Borland Software Corp. (BORL) to $1.50
a share, valuing the company at around $113 million, after a second
suitor approached Borland last week.
The higher bid, which is backed by both the Micro Focus and
Borland boards, is the third time Micro Focus has had to lift its
offer, from a starting bid of $1 a share in May.
The second bidder, who hasn't been identified, last Thursday
submitted a non-binding offer of $1.25 a share for Borland and
indicated it could complete due diligence in two weeks from June
24.
Micro Focus is due to hold a shareholder meeting July 17 to
approve the deal, while Borland has a meeting scheduled for July
22.
"There continues to be a strong strategic rationale for this
transaction and we believe that it is in the best interests of both
companies, their shareholders, employees and customers," said Micro
Focus chief executive Stephen Kelly. He said that regulatory and
shareholder approval processes are progressing well.
The increased bid will have a minimal negative impact on
earnings compared with Micro Focus' original bid, but it remains to
be seen if the latest offer will be enough to secure the company,
Numis analysts said.
Further bids could weigh on Micro Focus shares, but Singer
analyst Tintin Stormont still expects it to win out in the end.
Once a software heavyweight and Microsoft Corp (MSFT) rival,
Borland's operating losses have grown over the last two years; it
reported a net loss in the year to Dec. 31 of $216 million.
Micro Focus management said at the time of the acquisition
announcement it has a "clearly defined plan to address the
financial and operating performance of Borland, with a view to
repositioning the business to achieve acceptable returns on sales
and investment."
Micro Focus last month also bought Compuware Corp.'s (CPWR)
testing and automated software quality business and both
acquisitions would give Micro Focus a footprint in software testing
which makes sure software works properly when it is in
development.
At 0855 GMT, Micro Focus shares were up 0.3%, or 1 penny, at
376p.
-By Kathy Sandler, Dow Jones Newswires; 44-207-842-9293;
kathy.sandler@dowjones.com