PE Firms Sweeten Bids for SkillSoft

(Reuters) – SkillSoft Plc (SKIL.O) said SSI Investments III Ltd , a consortium of private equity firms, raised its cash offer for the e-learning software maker to $1.2 billion, sending its shares up 8 percent.

The consortium of funds owned by Berkshire Partners, Advent International and Bain Capital has revised its offer for SkillSoft to $11.25 per American Depository Share (ADS) from its previous bid of $10.80 per ADS, the company said in a statement.

The revised offer represents a premium of 15 percent over SkillSoft’s closing price on February 11, the company said.

On February 12, SkillSoft, whose competitors include India’s NIIT (NIIT.BO), Kenexa (KNXA.O) and Blackboard Inc (BBBB.O), said it agreed to be acquired by SSI Investments for about $1.1 billion, which investors thought undervalued the company.

“I think that the revised offer is still lower than what I would have expected the company to be valued at,” Sidoti & Co analyst Matthew Kempler said.

Neither Sidoti nor the analyst have received compensation from the company in the past 12 months, own shares in it or are its officers or directors.

Kempler said the revised bid is more likely to be accepted as the “go-shop” did not churn out a higher price and as the company’s largest stakeholders are in support of the deal.

The go-shop period in the merger agreement that allowed SkillSoft to scout for better offers ended on March 6 without any competing bids materializing.

“I do not know if investors are satisfied, but I think they are going to be more willing to accept (the revised bid),” he added.

Dublin, Ireland-based SkillSoft, which provides Internet-based training courses and software to businesses and governments, said SSI Investments has received an undertaking from Columbia Wanger Asset Management, which holds about 21.5 percent in the company, to vote in favor of the revised deal.

The shareholder meeting scheduled for April 6 will be adjourned and reconvened on or about April 29, SkillSoft said.

“We believe the agreement by Columbia to vote for the deal, the absence of any competing bids, and the increased offer price will likely lead to a favorable vote for the acquiring group,” BMO Capital Markets analyst Jeffrey Silber wrote in a note.

Wedbush Morgan Securities analyst Ariel Sokol cut his price target on SkillSoft stock to $11.25 from $13, saying he does not expect a higher bid.

American depository shares of SkillSoft rose about 8 percent to $11.12 Thursday morning, making the stock one of the top percentage gainers on Nasdaq. (Reporting by Manasi Phadke; Editing by Unnikrishnan Nair)