By Emma-Victoria Farr
FRANKFURT (Reuters) – Two associations representing minority investors in Software AG said they will speak out against suitor Silver Lake’s plans to delist the company at a shareholder meeting on Wednesday, on concern about the impact on smaller shareholders.
Private equity firm Silver Lake has offered to buy Software AG for 32 euros per share, valuing the German software developer at 2.37 billion euros ($2.61 billion) and said it plans to take the company private.
Software AG has backed the Silver Lake offer despite a higher 34-euro a share non-binding bid coming in from Bain-backed Rocket Software earlier this month.
Some investors argue that the Silver Lake offer undervalues Software AG and that minorities never fare well in delistings.
While a vote regarding the delisting is not on the agenda at Wednesday’s AGM, investor association SdK said it will vote against related topics, such as the reduced company dividend, to express its disagreement with the Silver Lake plan.
“A delisting is a red flag for minority shareholders,” said SdK board member Andreas Schmidt.
He said it seemed the meeting’s topics, such as a reduced dividend and suggestion for future AGMs to be held only virtually, were a step to forcing the remaining free shareholders out of the company.
“A possible delisting would be a hard cut for private investors, some of whom have been invested for many years,” said lawyer Wolfgang Schaerfe, who will represent shareholder association DSW at the AGM.
Software AG has faced criticism from shareholders over its handling of the sales process. London-based Schroders, the company’s largest outside shareholder which owns 8%, said Silver Lake’s offer “materially undervalues the company”.
SdK’s Schmidt plans to ask management whether all offers were discussed and assessed adequately in advance.
Software AG, Rocket Software and Silver Lake all declined to comment.
($1 = 0.9084 euros)
(Reporting by Emma-Victoria Farr; Editing by Christoph Steitz and Sharon Singleton)
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