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May 2, 2007 11:48 am

Fujitsu to launch €420m bid for French IT group

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Fujitsu is taking the unusual step for a Japanese company of launching a counter bid for GFI Informatique, a French systems integration company that is considering a capital increase to give management a 27 per cent stake.

The Japanese company is aiming to acquire 66.67 per cent of GFI Informatique for €8.50 per share. The €419m deal would give Fujitsu a significant foothold in Europe’s IT services market.

“This deal fits into Fujitsu’s strategy. The domestic [Japanese] market is mature, so they have to go overseas to grow,” said Yoshiharu Izumi, electronics analyst at JP Morgan in Tokyo.

Japanese companies are becoming increasingly active in cross-border M&A. But it is unusual for a Japanese company to pursue an offer that has not been agreed with the management of the bid target.

GFI Informatique, which has a strong position in the French IT services market, is in the middle of a capital restructuring, which would give Itefin Participations, a 27 per cent stake in the group. Itefin Participations is a holding company owned 56 per cent by Apax Partners, the UK private equity firm, and 44 per cent by a shareholders’ and managers’ group.

The capital restructuring is being put to a shareholders vote at an extraordinary general meeting, which was postponed from May 11 until May 21.

Fujitsu said its offer was conditional on the withdrawal or defeat at the EGM of the capital restructuring plan involving Itefin.

The Japanese high tech group said its offer price represented a 21.6 per cent premium over the adjusted one month weighted average share price as of April 27.

“It is also expected to be a significant premium over the subscription price in connection with GFI Informatique’s proposed capital increase reserved for Itefin Participation,” Fujitsu said.

Fujitsu, which acquired the UK’s ICL in 1990 and struggled to turn it round, has had better luck with its overseas operations in recent years.

The overseas markets – mainly the US and Europe – have provided profits for the company since the year ending March 2003.

Fujitsu Services, its European IT services unit, had net sales of £2.3bn in the year to March 2006.

GFI Informatique, which has strength in systems integration and application and infrastructure outsourcing, had revenues of €633m in the year to December, 2006.

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