Merant to return £56m to investors as takeover talks end

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The Independent Online

Merant, the e-business software company, said it had ended takeover talks for the business as it unveiled plans to return at least £56m to shareholders.

The group also announced the sale of a second business to Golden Gate Capital, a private equity company. The disposal of DataDirect, an enterprise data and connectivity business, for $29.3m (£19.9m) cash to Golden Gate Capital follows the recent sale of its legacy development business in July for £45m.

Shares in Merant closed down 16p at 80p.

Once the sale of DataDirect is completed, Merant is expected to have £93m to £100m cash on its books. It plans to return surplus cash of "at least" £56m to shareholders before its financial year ends on 30 April.

While Gary Greenfield, the chief executive, said Merant was still studying the most effective ways of doing that, he noted that a special dividend or stock repurchase were two options under consideration.

Merant, which in July said "expressions of interest" had been received for the company, yesterday said that those talks had now ended. No explanation for the breakdown was given.

"These are major milestones in our restructuring of Merant, aimed at delivering shareholder value in these challenging times in our market," Mr Greenfield said.

He said he believed DataDirect had been sold for a "fair price" particularly in light of current market conditions. In the year ended 30 April, that business reported profits of £4.8m on sales of £31.2m.

Following the sale, Merant will be left with one main operating unit whose software helps companies move data onto the internet. Mr Greenfield has already announced plans to step down from the company once a successor had been found.