Good morning!

Today we have some updates from:

Scisys (LON:SSY)

  • Share price: 250p (+22.5%)
  • No. of shares: 30 million
  • Market cap: £74 million

Recommended Cash offer

Well done to holders of this one.

I've only covered it once before, back in March 2018.

This 254.15p bid is at a 24.6% premium to last night's closing price, so anyone who bought into it recently will be feeling lucky.

The premium is even bigger if you consider the price at which the stock has traded over the past six to twelve months.

The Board unanimously recommends the deal. That's a huge help, and probably means that the deal will go through, unless there's an even higher bid.

I can only think of one recommended offer which completely fell through - the offer for Revolution Bars (LON:RBG) in August 2017.

Comment by the SCISYS Chairman:

We believe SCISYS and CGI are highly complementary businesses sharing similar values and are confident that the combination will enable SCISYS to benefit from CGI's size, strength and global reach."

SCISYS is an IT services provider, and in a similar vein, CGI Inc is an international IT and business consulting group (2018 revenues of 11.5 billion Canadian dollars). Their activities sound very similar. Maybe they've been competing for the same work?

The SCISYS directors control 25% of the shares and all of these will be voted for the takeover.

Rationale - SCISYS says that the size of its management team has been insufficient to study acquisition deals which would allow the company to scale faster. They also blame the low valuation attached to the shares as a reason why they couldn't do more deals, using their equity as currency.

My view - those director shareholdings will…

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