Micro Focus Takeover Rumours (MCRO)


Micro Focus Chart

Micro Focus Takeover Price

Micro Focus Takeover Forum Posts

Things could look better if Management hit their debt reduction target of 2.7 x EBITA (EBITA x Takeover Multiple) - Debt / shares in issue ($1.1B x 6**) - $2.97B / 335m = $10.83 (830p) ** Average takeover multiple is actually much higher. However, this may take another two years as indicated by Management's three year turnaround plan to reduce debt by at least $1B. Hopefully, they can also increase EBITA. Probably suit the core holders like Dodge & Cox (17%).
Its interesting one year ago 18th Oct 19, when the shares were 1116p, bid rumours started, all denied, but no smoke with fire perhaps. Now at 246p instead of 1116p they must look attractive to someone. This was the article last Oct. https://www.bloomberg.com/news/articles/2019-10-18/open-text-is-said-to-weigh-takeover-offer-for-rival-micro-focus
This share is looking very interesting. Big shove down every morning and then post-close buys. I am guessing that this is being manipulated down by a hedge-fund and the sells are being squared off with market makers who are in on the scam. Presumably there has to come a point where MCRO is worth a speculative takeover bid. Either that or the management are all liars and the firm is bust. But last RNS that I saw said 'cash generative' and 'debt reduced' or something like that. Does anyone here know when the next results are going to be announced?
Dipped in again this morning and bought a few. Microfocus is not going bust anytime soon, takeover more likely the longer the sp stays down. With all MCRO's customers, long term contracts and free cash generation, plus debt reducing and managed to 2024, my money is long on a sp recovery, just need the news to push it along. The last rns was helpfully positive but with out continual or substantial good news there will be the tendency to for sp drift.
If there are no more major nasty shocks and we get a stream of good news such as profit and cash generation in the results, reinstatement of a prudent dividend whilst demonstrating a sensible paying down of loans, along with contract wins, cost reductions, director's buys, share buybacks and even takeover bids - we should be in for an interesting ride. The Guru article says it all, the fact is that MCRO starts paying a dividend again, many punters will return and even if the share price were not to respond, where do you put your money to get some sort of decent return? This business has customers, long term contracts and generates significant free cash. There are many businesses that have swallowed a bad acquisition and most eventually recover and often stronger after rationalising their business.
Watford, its priced well below fundamentals which means the market is expecting something very wrong to happen in the future. Or a takeover at a 20-30% 'premium' which will in any case screw all the shareholders.
Monty - if you believe in the story (even Credit Suisse have this down as a recovery play) then chill for a while. Once the shorters leave (and they will - plenty of others to feed on) or we get a sniff of good news or takeover (they will come - even if in rumour only)and anything approaching normal market conditions, then today's SP will start to look like the bargain of a lifetime. ;-)
those short will no doubt be a little anxious - and by the time the US opens expect this to rocket further. Wouldnt be surprised to see the old takeover rumour rehashed as wel for good measure just to boost the price north of 500p once more
Micro Focus eyeing equity raise - Dealreporter May 15, 2020 2:51 PM ET|About: Micro Focus International plc (MFGP)|By: Brandy Betz, SA News Editor Dealreporter sources say Micro Focus (NYSE:MFGP) will raise equity to offset its high leverage and potential coronavirus headwinds. The company could place 20% of its issued share capital in an accelerated bookbuild, an equity market offering done in a short time period with little marketing. Micro Focus' debt level could reduce the chances of a near-term takeover, despite recent attempts to resume talks with former interested buyers. Source: Bloomberg. hxxps://seekingalpha.com/news/3575197-micro-focus-eyeing-equity-raise-dealreporter
found this a bit earlier Micro Focus +12% on reported acquisition talks Apr. 28, 2020 12:30 PM ET|About: Micro Focus International plc (MFGP)|By: Brandy Betz, SA News Editor Micro Focus (NYSE:MFGP) gains 12.1% after TMT Finance says the company is having go-private talks with potential buyers. TMT sources say the talks started after Micro Focus failed to find a buyer for its carved out HPE assets. Source: Bloomberg. Last October, reports circulated that Open Text was considering a Micro Focus takeover bid.
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