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Micro Focus shares surge as it agrees £5 billion takeover from Canada’s OpenText

·2-min read
A summer flurry of merger activity in the City is underway (Micro Focus)
A summer flurry of merger activity in the City is underway (Micro Focus)

Another big-name UK technology company is being snapped up by a foreign buyer, as the weak pound offers a discount to overseas suitors for British firms.

Micro Focus, the Newbury-based industrial software provider, has agreed a £5.1 billion offer from OpenText of Canada. The price -- 532p per share -- is almost double the level at which the stock was trading before the bid was made.

It follows news this week that Aveva, the FTSE 100 constituent, was the subject of a potential bid from existing shareholder Schneider Electric of France, which already owns 60% of the software firm.

The international takeover interest comes in big-name British tech companies comes with the weak pound offering, in effect, a discount to foreign buyers of UK assets, with City experts expecting more to come.

“With sterling now at bargain basement levels, we’re seeing appetite for wholesale acquisitions increase,” said James Hughes, analyst at Scope Markets,

“That’s offering some optimism for the longer term outlook of UK plc as well as the idea that risk on trades are coming back to the table as recession fears especially in the US abate a little”.

Sterling traded at $1.18 on Friday, taking its lost over a year to over 14%, and near the bottom of its 52-week trading range at $1.17.

Shares in Micro Focus surges by over 90% on Friday to 512p, leaving the stock just under the offer price.

Darktrace, the Cambridge-based cyber security firm, is at the centre of interest from private equity to take the company off the London Stock Exchange.

Fast-growing tech stocks are not the only ones attracting interest from international buyers. Ted Baker, the fashion chain, is being snapped up by the US owner of Juicy Couture, Authenic Brands Group.