Troubled TTP surges on Motorola offer

The loss-making British mobile phone software developer TTP Communications has averted further financial turmoil by agreeing to a £103m takeover by the US giant Motorola.

Motorola has agreed to pay a significant premium to buy TTP in spite of its recent poor financial performance. TTP's sales fell 36 per cent to £37.2m in the year to 31 March, it announced yesterday, while recording a loss before tax of £27m compared to a £4m profit in the previous year. Its cash outflow of £20.7m contrasted with the £6.4m inflow the year before.

Dan Ridsdale of Bridgewell Securities advised investors to accept Motorola's 45p-a-share cash offer. It is worth more than three times the 13p closing price of TTP shares the day before the offer was announced.

Bruce Anderson, TTP's finance director, is confident the takeover will proceed, adding that a "leftfield" offer from another party would have to be significantly higher to be compelling.

Motorola, which unsuccessfully tried to buy the US operating system developer Palmsource last year, appears to attribute more value than the market to the Cambridge-based company's technology. Richard Windsor, an analyst at Nomura Securities, expects Motorola to use TTP's software as the platform for its low-end mobile phone range. He views TTP as a better acquisition for this purpose than Palmsource, and added that TTP will cost a third of the price.

Motorola pays TTP royalties to use its technology, so buying the supplier will potentially reduce its costs.

For TTP, the bid comes as a welcome relief after a disastrous year. In fiscal 2006, TTP spent 84 per cent of its sales on the research and development of products related to third-generation network technology and its AJAR applications platform. However, those products weren't rolled out during the year which exacerbated the effect of declining sales of handsets that use its older technology.

Mr Anderson said: "We were caught in the middle. That hindered our ability to do major deals. This takeover provides financial stability." He said TTP had already held talks with Cazenove, the investment bank, regarding a fundraising.

TTP shares leapt to 43.25p from 13p following the announcement of the offer.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003