Software AG shares jump 50% after Silver Lake takeover offer (updated)

Software AG

24/04/2023 10:32

(Adds share reaction, adds financing details from CEO,
transaction closing)
    By Emma-Victoria Farr and Hakan Ersen
       FRANKFURT, April 24 (Reuters) - Shares in Software AG
 SOWGn.DE  jumped almost 50% on Monday following a takeover
offer from private equity firm Silver Lake late last week that
values the German business software developer at 2.2 billion
euros ($2.42 billion).
    Software AG Chief Executive Sanjay Brahmawar said on Monday
that the company expected an operating profit margin in the
upper range of 25%-30% over the medium term, pushing back
expectations for a target originally set for 2023. 
    For the current year, Brahmawar now sees a margin of 16% to
18%. He said first-quarter earnings, due to be released on
Thursday, are in line with market expectations and full-year
targets remain unchanged.
    Software AG's shares were trading at 29.9 euros on Monday,
close to Silver Lake's offer price of 30 euros per share made
late on Friday after markets closed.
    If the takeover offer is successful, the aim would be to
delist the company following the transaction, Brahmawar said.
    Silver Lake's offer is fully funded with equity and one
billion euros in debt financing provided by JP Morgan  JPM.N ,
Brahmawar added.
    The offer is subject to a minimum acceptance threshold of
50% of all outstanding Software AG shares plus one share and the
transaction, including regulatory approval, is expected to close
in the fourth quarter of this year.
    Silver Lake originally announced an investment of 344
million euros in the software company in December 2021 via a
convertible bond, which upon conversion would represent nearly
9% of issued Software AG shares. 
    
    ($1 = 0.9104 euros)

 (Reporting by Emma-Victoria Farr and Hakan Ersen, Writing by
Friederike Heine, Editing by Kirsti Knolle, Kirsten Donovan)
 ((friederike.heine@thomsonreuters.com;))