LONDON (Alliance News) - Capita PLC late on Wednesday said it does not intend to lift its offer for Xchanging PLC after the takeover target switched its allegiance to back a higher bid by consultancy Computer Sciences Corp.
Capita, an outsourcing company in the FTSE 100 index of London's biggest companies, said it still believes in the "strategic logic and potential benefits" of buying Xchanging, a business processing, procurement and technology services provider listed in London.
However, Capita said it "assesses many acquisition and organic investment opportunities" and maintains "strict financial discipline" when doing so.
Capita's offer for Xchanging values the company at 160 pence per share and remains open for acceptances until 1300 GMT on December 16. Should its offer lapse, Capita said it reserves the right to approach Xchanging again in the event that CSC's 190p per share bid falls through.
CSR's bid, which was revealed and recommended earlier on Wednesday, values Xchanging at GBP488.0 million.
Capita stands to profit from CSR's bid, as the FTSE 100 outsourcer owns a 9.99% stake in Xchanging, having acquired 24.8 million shares at 160p each on the open market. Capita bought those shares after its bid was recommended by Xchanging on October 14.
Shares in Xchanging closed up 10% at 193.74p on Wednesday, while shares in Capita closed down 3.0% at 1,178.00p.
On top of trumping Capita's bid, CSR has ascribed greater value to Xchanging than a 175.0p per share approach from US-based Ebix, a supplier of on-demand software and e-commerce services to the insurance, financial and healthcare industries.
Also on Wednesday, the UK's Takeover Panel said its executive ruled that Ebix must by 1700 GMT on the 53rd day after publication of CSR's offer document either announce a firm intention to make an offer for Xchanging or walk away.
"Each of Xchanging, Capita and Ebix has accepted this ruling. CSC has requested that this ruling be reviewed by the Hearings Committee of the Panel," the Takeover Panel said.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Updates by Sam Agini; samagini@alliancenews.com; @samuelagini
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