Open Text pours cold water on Micro Focus acquisition rumours

(Sharecast News) - Both Micro Focus and Open Text Corporation put the kibosh on reports that the Canada-based enterprise software giant was considering a takeover bid for its London-listed peer on Monday.
The FTSE 250 company had said it was pressing ahead with a review of its operations in August, after it slashed its full-year revenue forecast and watched its share price slide through the year-to-date.

On Friday, Bloomberg reported that Open Text had consulted advisors about whether to make an offer for the beleaguered Micro Focus, citing sources "familiar with the matter".

They reportedly said that a deal for the company would be challenging, given Micro Focus' large debt pile and "declining growth prospects".

As the news came after the close of trading in London on Friday, the positive reaction of investors was reflected in Micro Focus' American depository receipts, which rose as much as 13% on the reports.

However, on Monday morning, Open Text Corporation confirmed to the market that it was not considering a bid.

"OpenText, a global leader in enterprise information management, notes the recent press speculation and confirms that it is not considering a potential acquisition of Micro Focus," the Ontario-based company said in its statement.

Micro Focus also responded to the speculation, saying: "the Board of Micro Focus International notes the announcement by Open Text Corporation confirming that it is not considering a potential acquisition of Micro Focus."

As at 0807 BST, shares in Micro Focus were already down 6.71% at 1,014.6p.