Golden Gate Sells Stake in Micro Focus

LONDON (Reuters) – Golden Gate Private Equity placed its 22.3 percent holding in British software provider Micro Focus International (MCRO.L), raising about 117.1 million pounds ($165.6 million), according to UBS, which handled the placing.

UBS said in a statement on Wednesday that 45 million shares, representing Golden Gate’s entire remaining holding in the company, had been placed at 260 pence a share.

Earlier on Wednesday, the bank said Golden Gate was proposing to sell about 25 million shares, or 12.4 percent of Micro Focus, at a price of 255 to 265 pence a share.

Analysts David Toms at brokerage Numis, who rates the shares a “hold”, said he would look to add to holdings of the stock at 260 pence a share.

“We remain a little nervous about the sector backdrop (but) if we’re wrong, there could be material upside and the shares are cheap (and a rare ‘growth in a downturn’ stock)”, he said in a note.

“On the flipside, if profit momentum disappears in H2, as consensus implies, then we worry that three times EV:Sales (enterprise value over sales) could look a little exposed.”

Panmure Gordon analyst George O’Connor noted Golden Gate had priced the placing on a par with previous sales of 12 percent of the stock on Sept. 8, 2008 and 7 percent on July 4, 2007.

Shares in the company, which reported “solid” third-quarter trading on Feb. 13, were down 6.4 percent at 269 pence by 1056 GMT. 

(Reporting by Paul Sandle; Editing by David Holmes) ($1=.7071 Pound)