Bain, Advent Approach IT Firm Micro Focus

British information technology company Micro Focus International said it has been approached by private equity firms Bain Capital and Advent International, Reuters reported. The company, which specializes in mainframes, lost its chief executive last month, Reuters wrote. The company said there was no certainty that any offer for the company would result in talks.

(Reuters) – British IT firm Micro Focus International said on Friday it had received approaches from two private equity firms, sending the shares of the mainframe specialist higher on the prospect of a bidding war.

The company, which warned on profits in February and lost its chief executive last month, said it was exploring a number of approaches, including from U.S based private equity firms Bain Capital and Advent International.

Micro Focus said there was no certainty that any offer for the company would result from the talks, nor at what price any offer might be made.

It said in April it had received a takeover approach but did not name the suitor.

Both companies had been in talks with Micro Focus for some weeks, sources close to the matter told Reuters.

Micro Focus, which supports mainframe computer applications for the Tesco and Boeing, has been hit by weak demand in its COBOL-language software business and problems with the testing arm it created through acquisitions in 2009.

Shares in the company rose as high as 407 pence, the highest level since the February profit warning, on news of the multiple talks.

They were trading 7.7 percent higher at 398.1 pence at 1152 GMT, valuing the firm at about 790 million pounds ($1.3 billion).

The FT said last month that Bain was thought to be preparing a bid worth 425 pence to 450 pence a share.

(Reporting by Paul Sandle and Simon Meads)