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Software company Finzsoft said today it had received notice of a partial takeover for over 60 per cent of the company from Pi Capital Investments at $1.30 per share -- a 24 per cent premium to yesterday's price.
The offer will be to all shareholders on a prorata basis although Pi has secured a lock-up agreement with 44 per cent owner Software Laboratories and 19 per cent owner Bogside Trust, both controlled by Finzsoft founder and managing director Barrie Shannon.
Mr Shannon said he hoped shareholders would hold their shares. He expected to end up with a 10-20 per cent holding.
He said Finzsoft needed more capital and he was unable to provide it, that was why he had agreed to sell down.
The company was expanding in Australia and that growth was creating demand for more capital.
"It's time to move to a new capital structure," he said.
Pi is controlled by an Auckland merchant bank, controlled by Andrew Holiday and Ian Wells.
The lock-up agreement required Pi to issue a takeover notice for Finzsoft within 10 working days.
Yesterday Finzsoft issued a profit warning. It said a delay in concluding new finance contracts had impacted its year to March results.
The company said it expected its profit to come close to break-even position, and to generate revenues around levels seen in previous years.
The company -- which operates the core business for finance institutions that lend money or take savings and deposits -- said it was continuing to invest in product development during the year.
Prospects were "better than ever at this same stage in previous years, with a number of international projects at an advanced stage of negotiation".
But the activities would affect short-term profitability.
It was also investing in bringing its main product, Sovereign finance and banking software, up to recognised international status.
The company said a major project, operating automotive and leasing finance for St George Bank, had "greatly increased" its exposure in Australia.
Finzsoft was continuing to follow its plan of expansion without drawing on debt or new capital, due to its strong cash reserves.
In May last year Finzsoft reported a 73 per cent increase in annual profit before tax and amortisation to $1,242,799, compared with $716,171 the year before.
Shares in Finzsoft last traded at $1.05, compared with a year low of 80c and a year high of $1.31.
- NZPA
