Flomerics holds talks with new suitor

Flomerics, the Aim-listed engineering software company facing a hostile bid from Mentor Graphics of the US, has identified a rival potential bidder in Autodesk.

The company has been in preliminary discussions for four weeks with Autodesk, a design software group listed on Nasdaq. It has a market capitalisation of $9.3bn (£4.7bn) and annual sales of $2.2bn.

The news added 5½p to shares in Flomerics, which closed yesterday at 112½p.

Mentor, also a Nasdaq-listed electronic design specialist, is offering 104p in cash plus the final dividend of 1.6p. The company is much smaller than Autodesk, with a market capitalisation of about $1.1bn.

The first closing date for its bid is on Monday. Mentor said its offer remained the only one available. “It is in cash and offers good value. Shareholders should not be distracted by the unconfirmed possibility of other bidders who may or may not table a rival offer.”

Mentor’s bid values the equity in Flomerics at £25.5m. It started building a stake in early March, buying a 20.1 per cent holding from Pricap, the largest shareholder, at 50½p a share. It now has just under 30 per cent.

Flomerics, which recently celebrated its 20th anniversary as an independent company, has consistently urged shareholders to reject the offer.

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