Ideagen board to recommend Hg acquisition, Astorg bid still possible

9th May 2022 08:28

(Sharecast News) - Ideagen confirmed it was recommending a cash offer from a company linked to Hg funds on Monday, in a deal valuing its share capital at £1.06bn.

The AIM-traded firm said it has reached agreement with Rainforest Bidco - a company indirectly controlled by funds managed by Hg Pooled Management - for Bidco to acquire Ideagen under a scheme of arrangement.

Under the deal, Ideagen shareholders would receive 350p cash for each share, representing a 52% premium to the closing price on 11 April - the last working day before speculation over the possibility of an acquisition emerged.

Bidco also agreed that a final dividend of up to 0.2875p per share for the 2022 financial year could be paid without reducing the acquisition price payable to shareholders.

The acquisition remained conditional on the approval of Ideagen shareholders.

Ideagen's board said it considered the terms of the acquisition to be "fair and reasonable", adding that they intended to unanimously recommend shareholders vote in favour of the deal.

"We believe that the offer from Bidco represents value for shareholders and the Ideagen directors unanimously intend to recommend the offer to shareholders," said non-executive chairman Richard Longdon.

"The all-cash offer represents a compelling and attractive opportunity for shareholders to realise and crystallise their investment in Ideagen in the near term and also provides a significant premium to the prevailing share price notwithstanding the backdrop of the wider risks posed by the political and macro-economic environment."

Longdon said the offer reflected the "quality, strength and long-term performance" of Ideagen's businesses and its future growth potential.

"We believe that Hg's track-record and expertise in supporting and growing software businesses would provide a complementary partner for Ideagen's stakeholders."

In a separate announcement on Monday, Ideagen confirmed it still remained in discussions with Astorg over a potential competing bid for the company, with Astorg granted due diligence.

At 0856 BST, shares in Ideagen were up 47.2% at 357.7p.

Reporting by Josh White at Sharecast.com.