Sage, the UK’s largest listed software company, rebuffed an attempt by the board of Visma to secure a higher offer for the accounting software group after the Norwegian company’s board withdrew its support for the £334m ($583.5m) cash bid.
”Sage is unaware of any material new financial or other information relating to Visma that should cause Visma’s board to withdraw its recommendation...Sage will not be changing its offer price, or any other material terms of its offer,” the business software group said.
Sage was responding to an earlier announcement on Wednesday morning from Visma’s board that they were pulling their support for the offer because it no longer valued valued the company fairly.
“Since the announcement of the offer, the board has from certain larger shareholders received signals that the offered price is not high enough...the board can no longer endorse the view that the bid is fair on the current level,” Visma’s board said in a statement.
News of an agreed deal last month triggered a 17 per cent jump in Visma’s share price. Since then the shares have been hovering at about NKr125-126 - supported by an unexpectedly strong first quarter - dulling the sparkle of Sage’s NKr125 a share bid which at the time of the original announcement offered a premium of 21 per cent.
However, at 15 times Visma’s 2005 operating profit, the proposed acquisition is slightly more expensive than many of Sage’s past acquisitions.
Despite the withdrawal of its recommendation, the board said it still supported the deal from a strategic point of view and added that it was up to shareholders to decide. The bid has been cleared by regulators and shareholders representing more than 90 per cent of outstanding shares. Sage’s offer stands until April 20.
If the Visma deal goes through it will be Sage’s largest acquisition ever. The UK company considers Visma to a good strategic fit, which has virtually no business in the Nordic region at present.
Visma is the largest Scandinavian provider of business management software and services to small- and mid-sized companies, with revenues of about £166m and 200,000 customers across Norway, Sweden, Finland and Denmark.
The proposed move is the latest in a series of acquisitions by Sage and comes as the company faces increasing competition in the software market for small- to medium-sized business from companies, such as like Microsoft.
It comes just two months after Sage announced a £184m cash agreement to buy Verus, a US credit-card processing company, and is in line with indications that Sage gave last year that it was looking to increase its debt levels with larger deals.
On Wednesday shares in Visma were trading at NKr126 almost 1 per cent up on the opening price.