By Emma-Victoria Farr
(Reuters) -Rocket Software on Tuesday announced an improved offer for the acquisition of the entire share capital of Germany’s Software AG at an initial offer price of 34 euros per share ($37.43).
The non-binding offer from Rocket Software, which is backed by private equity firm Bain Capital, comes after a bidding war for the German software company emerged last week.
“This is not a superior offer and the management board of Software AG … are in no position to consider it,” Software AG said in a statement on Tuesday evening, sticking by its support for another offer from private equity firm Silver Lake for 32 euros ($35.28) per share, which values the German company at 2.37 billion euros.
Rocket Software said its latest offer “would be a more compelling opportunity for Software AG’s employees, customers, and other stakeholders, and will deliver a superior outcome for Software AG’s shareholders.”
Rocket Software’s 34 euro offer price reflects a premium of 73.6% compared to the undisturbed closing share price on April 20, and if accepted would make it a major shareholder.
As part of its improved offer terms, Rocket Software says that if Software AG’s foundation and Silver Lake support the combination and are willing to sell their shares to offer a controlling stake, Rocket Software would increase its offer price to 36 euros, which would represent a premium of 83.8%.
Rocket Software owns shares amounting to around 10% in Software AG.
Silver Lake originally announced an investment of 344 million euros in the software company in December 2021 via a convertible bond, and has board representation at the firm.
Boston, Massachusetts-based Rocket Software offers software solutions to enterprises across all industries, to help with IT challenges across infrastructure, data, and applications.
German multinational software firm Software AG, which is listed in Frankfurt, develops enterprise software for business process management, integration, and big data analytics.
($1 = 0.9084 euros)
(Reporting by Emma-Victoria Farr in Frankfurt and Urvi Dugar in Bengaluru; Editing by Chris Reese, Aurora Ellis and Daniel Wallis)
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