Logica’s shareholders have overwhelmingly voted in favour of accepting CGI’s recommended cash offer of 105 pence, dampening speculation that the British company may receive a counter-bid from another interested party.
It was revealed at the end of May that Canada-based CGI had placed an offer, worth an estimated £1.7 billion, for one of the UK’s last remaining software and information technology services companies, Logica.
The deal was heavily criticised by the analyst community, stating that it highlighted the failures of Logica’s management and that CGI would not be able to create a new global business by integrating Logica’s European operations. However, there was also much debate about whether or not the bid might spark another company to trump CGI and make a counter-offer.
The news that some 99.54 percent of Logica’s shareholders voted in favour of CGI’s bid price will put these rumours to rest, and it is expected that the acquisition will complete on 20 August.
“We will immediately start the process of successfully integrating the two businesses to create a global technology services leader with 72,000 professionals,” said Michael E Roach, president and CEO at CGI.
“The date [of 20 August] is indicative but may be extended if any of the conditions takes longer than anticipated to fulfil.”
Despite the speculation of a counter-offer, Anthony Miller, managing partner at analyst firm CGI is unsurprised by the result.
“Logica shareholders did not seem to have any second thoughts about accepting CGI’s 105 pence a share offer,” said Miller.
“We had said all along there would never be a counter-bid and it’s obvious that shareholders realised that it would be a jolly good idea to take the money and run.”
Investec Securities also issued a report at the time of CGI’s bid, stating that a counter-bid was unlikely, as anything in “excess of 10 percent of the deal price would push total deal values to levels that start to overlook Logica’s structural challenges after allowing for the heavy restructuring price tag that would likely be needed.”