We reported on July 1 that Lexmark International (NYSE: LXK) upped their bid for ReadSoft (NASDAQ OMX: RSOF-B) in the face of competition from Ohio-based Hyland Software’s UK business unit. It turns out that on July 7, Hyland upped their bid again to 45 kronor per share and stated that they now control 10.9% of ReadSoft’s stock between company and individual ownership.
Lexmark then announced July 14 that it had increased its offer to 50 kronor per share, which places the bid at $224 million according to Lexmark’s numbers. This is a 16% increase over its prior offer of 43 kronor per share and a 23% increase over its initial offer for the company. Lexmark’s offer is 11% higher than Hyland’s current best price.
A new wrinkle in Lexmark’s acquisition plans has appeared, however. With Hyland’s control extending to 10.9% of ReadSoft stock, Lexmark’s initial offer can no longer be completed as it was. The offer was contingent on acceptance by at least 90% of shareholders. The Hyland Control amount means there’s only 89.1% of shareholders not currently committed to one offer or the other.
Lexmark never reserved the right to waive the 90% acceptance, and so they withdrew their initial offer and presented the new offer. ReadSoft’s board has already recommended that shareholders accept the new Lexmark offer, and has engaged Evli Corporate Finance as financial advisors and Mannheimer Swartling as legal advisors.
“Lexmark remains convinced that the acquisition of ReadSoft will result in a strong strategic combination,” said Paul Rooke, Lexmark chairman and chief executive officer. “Lexmark has the financial strength, size and stability required for the business to realize its full potential and will be the best home for ReadSoft and its employees.”
Should the Lexmark acquisition take place, ReadSoft will join the Perceptive Software group to help expand Lexmark’s business footprint in the European market. Ardent conducted an initial analysis of the original Lexmark bid back in May. Much of that analysis still holds true, even with the bidding war Hyland instigated on June 18.
ReadSoft’s stock was up 10.15% as of 2:45 pm Central European Time, opening at 50.25 and trading between 50 and 51 kronor all day so far on the news of the increased Lexmark offer, which broke shortly before 8 am CET.
