Micro Focus Shares Advance on Bain, Advent Offer Approaches

Micro Focus International Plc (MCRO), a U.K. software provider whose chief executive officer quit last month, rose to the highest in three months in London trading after saying two U.S. private equity firms were among its suitors.

The stock gained 28.8 pence, or 7.8 percent, to 398.6 pence, the highest price since Feb. 11. The stock has risen 2.6 percent this year, giving the company a market value of 788 million pounds ($1.3 billion). Micro Focus was the third-biggest riser today among the 622 companies in the FTSE All-Share Index. (ASX)

“Micro Focus has received a number of preliminary, non- binding approaches which it has chosen to explore including approaches from Bain Capital and Advent International,” it said in a statement today. “At this stage there can be no certainty that any offer for the company will be forthcoming nor as to the price at which any offer might be made.”

Nigel Clifford quit as Micro Focus CEO on April 15 after less than a year in charge, two months after the Newbury, England-based company said sales and earnings in the fiscal third quarter ended Jan. 31 missed analysts’ estimates. Micro Focus said at the time it was unlikely to recover by the end of its fiscal year on April 30.

Chairman Kevin Loosemore said April 15 his immediate priority was to “deliver the year-end in line with shareholder expectations.” The company first said on April 26 that it may receive an offer.

“Micro Focus would represent an attractive consolidation platform for a private player looking to consolidate the fragmented legacy modernization software market,” Rajeev Bahl, an analyst at London-based Matrix Corporate Capital LLC, wrote in a note to clients today. “We stick with the view that 450- 455p is a realistic bid level.”

To contact the reporters on this story: Tim Farrand in Edinburgh News at tfarrand@bloomberg.net; Peter Woodifield in Edinburgh News at pwoodifield@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

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