Micro Focus ends takeover talks, to go for share buyback

UK software firm Micro Focus says takeover talks with two finance groups had ended partly on account of the current turmoil in stock markets.

The Berkshire-based group had set a deadline of 19 August for a deal to be concluded but following feedback from the potential bidders, it had decided to close the talks, it said.

One of the potential buyers, Advent International, said the current market turmoil was partly responsible for the decision to end the discussions, which had been agreed upon by all of the parties.

The first announcement of an approach came in April and Micro Focus said twelve days ago that the talks were still ongoing. However, reports over the weekend suggested the price offered for the Newbury-based company was below the expectations of the board.

Shares were down 4 per cent as Micro Focus said takeover talks had ended. However, the shares received support on the company's announcement that it intended to start buying back its own shares immediately and would consult over how to hand back more cash to shareholders.

Piror to the talks, the firm, specialising in software that extended the life of older IT systems, had fallen amid two profit warnings and the departure of its chief executive, but its latest update this month was more positive and brokers were hopeful of a revival.