- UK’s 6th largest tech company agrees $6 billion Canadian takeover
- Shareholders call time on five years of share price declines
- Latest in lengthening list of UK tech exits despite Government pledges
Enterprise software firm Micro Focus (MCRO) has agreed to be taken over by Canadian company Open Text (OTEX:NASDAQ) in a $6 billion cash deal.
Ontario-based company is offering 532p per Micro Focus share, a 99% premium to Thursday’s closing price.
After five years of share price declines, Micro Focus shareholders can be forgiven for snapping Open Text’s hand off. The 2017 merger with HP Enterprise’s software arm was a massive error in judgement and has cost shareholders billions in lost equity value, and the company nearly 50 years of independence.
As the UK’s sixth largest software company, losing Micro Focus is another blow to the UK’s shrinking large cap tech space.
UPSURGE IN UK TECH EXITS
This week saw speculation emerge that engineering software firm Aveva (AVV) will be swallowed by its 59% majority owner, Schneider Electric (SU:EPA). With cybersecurity peers Darktrace (DARK) and Avast (AVST) respectively mulling and closing deals with Thoma Bravo and NortonLifeLock (NLOK:NASDAQ), it means if all of these deals close, the UK stock market will lose its second, third, and sixth biggest software stocks by market value.
£1.2 billion healthcare tech firm Emis (EMIS) is also in negotiations after receiving an offer from UnitedHealth (UNH:NYSE).
So much for the Government’s empty promises of unleashing London’s equity markets to attract big tech companies. Some investors are still reeling from the short-sightedness that saw Cambridge’s microchip designs champion Arm Holdings flogged off to foreign owners.
Fortunately for UK investors, accessing global tech firms for long-term wealth creation opportunities has never been easier, while there are several fund and investment trusts too. It’s not quite RIP UK tech stocks, but the direction of travel is worrying.
