Micro Focus shares hit the roof with a 92.7% surge to 516.3p in late morning trading on Friday, after the company accepted an acquisition offer from information management solutions group OpenText for approximately $6 billion.
Micro Focus is one of the largest global software companies, and had a $2.7 billion pro forma trailing revenue for the 12 months to 30 April 2022.
“We are pleased to announce our firm intention to acquire Micro Focus, and I look forward to welcoming Micro Focus customers, partners and employees to OpenText,” said OpenText CEO & CTO Mark J. Barrenechea.
“Upon completion of the acquisition, OpenText will be one of the world’s largest software and cloud businesses with a tremendous marquee customer base, global scale and comprehensive go-to-market.”
“Customers of OpenText and Micro Focus will benefit from a partner that can even more effectively help them accelerate their digital transformation efforts by unlocking the full value of their information assets and core systems.”
Meanwhile, analysts commented the acquisition signalled a further weakening of the UK tech sector, with the pessimistic market outlook including a weak Pound Sterling leaving the country’s companies ripe for plucking by international bids.
“Weak sterling, to match a gloomy outlook for the UK economy, is once again leaving UK plc vulnerable to overseas bids and Micro Focus International looks to have fallen prey to a $6 billion offer from larger Canadian rival Opentext,” said AJ Bell investment director Russ Mould.
“While the premium for shareholders looks pretty healthy when compared with yesterday’s close, it is below the level the company traded at in 2019. It also further dilutes an already pretty threadbare-looking tech sector on the UK market.”