KEY POINTS:
Listed software company and export success story Software of Excellence could pass into foreign ownership and leave the sharemarket after management yesterday said they had received a takeover proposal from an overseas rival.
Directors of the Auckland-based dental records software firm said they had received a conditional takeover proposal of sufficient merit to allow due diligence to be conducted over the next three weeks.
For commercial reasons, the company making the proposal did not wish to be identified until it had completed due diligence and made an offer which will require regulatory approval and 90 per acceptance by shareholders.
However, SOE's directors said the firm had significant international operations and expertise in health information technology.
Chief executive Brian Weatherly confirmed the company was not from New Zealand, and was "somewhat bigger" than SOE.
The Business Herald understands the prospective buyer is a northern hemisphere-based company and its offer is likely to be pitched around the $2.60 mark.
SOE, which derives about 80 per cent of its revenue from the UK market, has made good progress over the last 18 months.
Its shares rose from around $1 last year after the company completed restructuring in late 2005.
They had been around $2 most of this year but had been on the way up again after the company revised its earnings guidance higher late last week. Yesterday's news saw them rise 45c or almost 21 per cent to $2.60, valuing the company at more than $68 million.
But ABN Amro Craigs analyst Brett Orsler believed SOE's recent performance meant the offer may need to be north of the possible $2.60 a share offer to win over shareholders.
"The company is in a strong financial position. It's got no debt and has about $5 million in the bank. That plus the recent upgrade in earnings which I'm not sure the market has fully comprehended yet given it was a few days ago, you're looking at a bid in the high $2s, possibly more for it to be successful."
Orsler said it would be a shame to see SOE delisted "because it is a really great little export success story really".
Weatherly said it was understood that if an offer was made and was successful, the company would continue to operate with current staff and management.
The board had formed an independent directors committee to oversee consideration of the proposal and any offer that may result.
