Rebus goes private in pounds 172m takeover

REBUS, THE computer services group, looked set to disappear into private ownership yesterday, after it agreed to a pounds 172m takeover by two US venture capital groups. Shares in Rebus jumped 18p to 177.5p yesterday as the company confirmed details of the cash bid, pitched at 182p per share.

General Atlantic Partners and Warburg, Pincus, the US private equity groups, are funding the offer. Unusually for a venture capital buyout, Rebus' management are not putting up any cash, although they will continue to run the company.

The prospect of a rival bidder entering the fray was all but ruled out yesterday, after Warburg and General Atlantic bought 27.7m Rebus shares, representing 29.96 per cent of its share capital, in the market at a share price of 182p.

The institutions which sold shares are thought to include Philips & Drew, the fund manager, which held a 16.6 per cent stake in Rebus.

The takeover ends a sorry stock market life for Rebus, which was demerged from CE Heath, the insurance broker, in April 1996. Although the shares had risen from 88p at the time of the demerger to 137.5p last Thursday - the day before Rebus revealed it had received a takeover approach - they have lagged behind other information technology stocks. "We announced very good results last November but the stock market didn't really react," said Peter Presland, Rebus' chief executive. "We have just been caught up in the general malaise that affects smaller companies."

Industry analysts pointed to Rebus' relatively pedestrian growth as another reason for its underperformance. But Ed McKinley, a partner at Warburg Pincus, insisted it had goodprospects. "Rebus is unusual in that it has leading positions in both the human resources and insurance markets," he said.

Mr Presland said Rebus had received takeover approaches from other IT companies and venture capital groups but none had been worth considering seriously. "The benefit is that we've now got some committed backers who can support the business," he said.

Outlook, page 15; Leading article, Review page 3

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