Guardian iT bows to rival's £56m offer

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The troubled disaster recovery firm Guardian iT yesterday finally agreed to a cash takeover by its rival, the US company SunGard, in a deal worth £167m.

SunGard has agreed to take on all of Guardian's £111m of debt while making an 80p a share cash offer for the business, valuing it at £56m.

Shares in Guardian, which announced it was in early bid talks in mid-February after issuing a raft of disastrous announcements, jumped 21 per cent, or 13.5p, to close at 79p.

Richard Raworth, Guardian's chairman, said: "After discussions with a large number of parties, we believe that SunGard's offer is the best means of maximising value for Guardian's shareholders."

SunGard said the acquisition would help it broaden its own offering to customers in Europe but also expected it to generate cost savings.

The 80p a share offer represents a premium of about 122 per cent over the closing price of Guardian's shares the day before it confirmed it was in takeover talks.

Analysts at advised shareholders to accept the offer, saying: "In the current subdued M&A [mergers and acquisitions] environment we see little prospect for an improved bid from a third party."

Guardian also yesterday reported a 2001 profit before tax and exceptional items of £4.9m, down from £9.1m a year earlier. Sales were £114.7m, up from £85.2m.

Taking into account a £66.3m goodwill impairment charge alongside an extra £19.9m of other exceptional charges, the company recorded a pre-tax loss of £94.5m.

Guardian, which issued two profit warnings last year after trading conditions deteriorated, was forced to admit in February that it had also uncovered various accounting "adjustments and discrepancies".

The discovery, it said yesterday, meant its operating profit in 2000 would have to be cut by £3.9m to £3.7m.

James Mann, SunGard's chairman and chief executive, said: "The combination of Guardian and our existing services business in the UK and France makes great commercial and strategic sense."

SunGard yesterday bought 17.5 million Guardian shares in the market at 80p each, representing about 24.9 per cent of the business.