Alterian, the Bristol-based database marketing software group that crashed into the red earlier this year, has rejected the £50m takeover approach it received late on Friday.
The all-cash, non-binding, indicative 80p per share offer came unexpectedly from FTSE-250 translation software firm SDL. It represented a 40% premium on Alterian’s closing price of 57p on Thursday.
This afternoon Alterian’s shares stood at 80.25p, up 16.25% on the day and an indication that some people believe the initial offer will have to be improved.
Alterian said in a statement it believed the offer significantly undervalues the business, based both on current position and prospects. It added: “Accordingly, the board recommends that Alterian shareholders take no action in relation to their Alterian shares.”
But SDL insists the price represents “a compelling opportunity for Alterian shareholders to realise a significant premium to the current market value”.
This latest development comes at a crucial stage in Alterian’s turnaround following its £4.29m pre-tax loss in April. A new chairman and chief executive are now in place and there has been a major boardroom clearout.
Today’s statement from Alterian says it is currently executing the business transformation plan announced on September 30 which will be completed by December 13.
The statement adds: “This will see a new forward-looking focus for the business including a substantial cost savings plan, which is already being implemented. As previously stated, the company will publish full details of the outcome of this review and its current progress in its interim results announcement during the week commencing November 21. The review is not investigating an option to sell the business.”
SDL says, however, that there is a strong strategic fit between the two companies adding that Alterian would be well-placed to expand its customer base through being a part of the group. SDL is one of the world’s top three providers of language services providing translation, localisation, internationalisation, interpretation, content and software development, software testing and global information management services.
It is based in Maidenhead and counts among its customers ABN-Amro, Bosch, Canon, Hewlett-Packard, KLM, Microsoft, Philips, SAP, Sony and Virgin Atlantic. It has deployed more 170,000 software licenses and provides access to on-demand portals for 10m customers a month through more than 60 offices in 35 countries.
It said today: “The board of SDL believes that the international capabilities, existing customer relationships, track record of acquiring and growing software businesses, together with the breadth and scale of SDL’s business, provide a strong platform to maximise the potential of Alterian's business.”
