Market Report: Micro Focus splashes out $1.2bn to buy US-based Attachmate Group


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The Independent Online

Software and computer consultancies rarely get the City excited, but on Monday a £730m deal by Micro Focus for its American rival helped its shares jump more than 15 per cent.

Computing services firm Micro Focus International splashed out $1.2bn (£730m) to buy larger, US-based, The Attachmate Group. Under the terms of the deal, Attachmate’s parent company, Wizard, will take a stake of about 40 per cent in the enlarged company and the merger should triple the British group’s business with annual sales of about $1.4bn. It will take on more debt and have to refinance but it soared 129p to 971.5p – the highest since it listed in 2005.

The wider market was quiet and the FTSE 100 finished broadly flat, down just 2.75 points to 6,804.21. Uncertainty about the Scottish vote and wider global political tensions remained cause for concern.

The main source of excitement was news that Dutch beer group Heineken has rejected a takeover bid from larger rival SABMiller. The news put the drinks market in play for a takeover with the likelihood of consolidation soaring.

SAB leapt to the top of the table – up by nearly 10 per cent, or 334.5p, to 3,740p. It is widely thought SAB made the approach as a defensive move to protect itself from a bid from the world’s No. 1 brewer, AB InBev. Meanwhile, Smirnoff vodka and Guinness maker Diageo fizzed up 40.5p to 1,853p as some said the spirits giant and SAB had previously held merger talks.

Dixons Carphone reacted positively to the news mobile-phone chain Phones 4U had gone into administration and dialled up a 7.7p lead to 379.9p.

Online grocery business Ocado was out of favour after making gains last week when it updated on strong summer sales. It fell by 21.9p to 284.7p.

Telecommunications specialist Spirent Communications snapped up Mobilethink, the owner of mobile data app Tweakker, for $20m cash but it slipped 1.2p to 103.8p.

On Aim, diagnostic-testing kits maker Immunodiagnostics Systems issued a profits warning on lower revenues and said it had been hit by currency moves. It tumbled 87.5p to 382.5p.