The company could be taken over by Silver Lake.
(Photo: IMAGO/Zoonar)
munich US financial investor Silver Lake has cleared the way for a takeover of Software AG. Rival Bain Capital had promised a higher offer for the Darmstadt-based company through American Rocket Software and pushed Silver Lake into the parade, but dropped its ambitions on Monday night. Bain and Rocket now want to sell their stake in Software AG to Silver Lake for 278 million euros. “Unfortunately, our efforts were not successful,” admitted Rocket founder and CEO Andy Younis. Bain criticized Software AG’s leadership for backing Silver Lake’s 2.4 billion-euro offer from the start.
The California-based technology investor has acquired a 41 percent stake in Software AG, according to its own statement. With the convertible bonds that Silver Lake has already dabbled in in 2021, the majority owner’s stake could increase to more than 50%. “Silver Lake’s investment in Software AG reflects our commitment to working with founders and management teams to help them build and grow great companies,” said Christian Lucas, co-head of Silver Lake’s European operations and chairman of the board of Software AG.
Just a week ago, Silver Lake’s ambitions looked grim. Faced with a tempting counteroffer from Bain Capital, Software AG shareholders waited and rejected Silver Lake’s €32 offer for their shares. Although Software AG Foundation has sold a 25.1 percent stake to investors, the proposal is likely to fail as the required majority appears to be a long way off. Shortly before the end of the initial acceptance period, Silver Lake announced that it would waive the 50% threshold — Bain apparently no longer believed it had a chance of securing a majority stake. However, by selling, Bain should at least not lose money.
Bain Capital wanted to pay at least 34 euros, but never submitted a formal offer. Financial investors want to merge Software AG and Rocket. Bain and Rockets now stress that it was never set up for a bidding war. “Rocket Software intends to continue its collaborative approach and, in light of this, has decided to sell its stake in Software AG to Silver Lake in order to give management and the board the opportunity to continue on this path.”
Bain Capital and numerous shareholders criticized at the shareholder meeting that Software AG did not even want to give the second bidder the opportunity to see their books. The board insisted on the company’s independence and saw the dangers of this in the merger with Rocket. The remaining shareholders of Software AG have until June 28 to sell their shares to Silver Lake. U.S. investors want to take the Darmstadt-based company off the stock exchange so it can announce a shift to a cloud-based business model without pressure from the stock market.
more: Silver Lake initially relinquishes its majority stake in Software AG