Northgate says takeover talks are over

Northgate Information Solutions shares dropped more than 12 per cent on Wedensday morning as the company said takeover talks had come to nothing.

Shares in the IT services and software company have traded up since the first week of the month when Northgate responded to market rumours by saying it had received a number of unsolicited takeover approaches.

Private equity players were believed to be interested, particularly in the company’s human resources division, which is the UK’s leading provider of payroll software. This business segment is seen as ripe for consolidation while also offering long term growth. Northgate’s board was looking for an offer that reflected its assessment of those prospects and terminated the talks when suitors’ valuations fell short.

The public services arm of the company supplies police forces and local government.

By mid-morning the share price had dropped 12.27 per cent to 82p. On October 4, when it announced the approaches, the price had risen to 52 week high of 99.5p and it had traded between 93p and 95p until Wednesday’s announcement.