US private equity firm Francisco Partners has emerged as the favourite to buy struggling software company Kewill after rival buyout house Symphony declined to table a counter offer, in a sale process that is expected to fetch over £100m.
Symphony yesterday declined to increase its 106p per share all cash offer for the business, an offer that was trounced last week by an 110p bid from Kinetic Bidco – Francisco Partners’ investment vehicle.
Kinetic Bidco’s offer values Kewill at £102.7m, and has been backed by management and a group of shareholders comprising Centaurus Capital, SVG Investment Managers, RGM Capital, and Pendragon Capital, who control 24.9 per cent of Kewill’s stock.
The shareholder group has agreed not to accept a rival offer unless it is priced at 118.25p or higher and tabled before the bidding deadline on Friday.
Francisco’s offer represents a 45 per cent premium to the software developer’s closing share price on 1 May, the day before Francisco’s initial offer.
Guildford, UK-based Kewill has issued a number of profit warnings over the past few years. The company reported pre-tax losses of £740,000 from revenues of £27.2m in the six months to the end of September.
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