Flomerics rejects Mentor advance
Flomerics Group, the maker of cooling and flow-simulation software for electronics systems, has rejected a £25.5m offer to buy the company from Mentor Graphics and will seek bids from other potential acquirers.
Mentor, which bought a significant minority share in the UK-listed software company in March, claimed its offer is fair, as it “reflects the price that has been paid to institutional shareholders seeking to exit Flomerics”. Flomerics said the hostile bid undervalued the company and “intends to analyse other alternatives available to the company, including potential interest expressed by a number of other parties”.
David Mann, chairman of Flomerics, said in a statement: “The offer was considered by the board of Flomerics, in conjunction with its independent advisers, and it was unanimously concluded that this offer, which is unsolicited, does not reflect the true value of Flomerics shares.”
Flomerics said that, although it was holding talks with other potential acquirers, the discussions are only at a preliminary stage and that there is no certainty any alternative offer will be forthcoming.
The Mentor offer is to buy each outstanding share of Flomerics for 104p, a premium of almost 20 per cent over the price at the beginning of trading on Friday May 9. Before Mentor bought its stake, Flomerics had traded at around 50p to 60p after slipping from close to 90p last summer. Mentor has bought additional shares since taking its initial stake, raising its ownership to almost 30 per cent of Flomerics.
Image: Flomerics writes software to simulate electronics cooling systems