News blog

Gladstone

  • BY: Andrew Hore |
  • POSTED: 24/11/2008 |

Constellation Software Inc has received bid acceptances representing 10.13% of the shares of Gladstone.

Constellation already owns 28.84% of the membership and education software provider. Part of that stake had previously been owned by Constellation before it sold it in April 2007 only to buy it back in March this year.

The additional acceptances for the 25p a share bid, which were received by 1pm on 21 November, mean that Constellation has total acceptances of 38.97%.

Acceptances at the first closing date of a contested bid can tend to be minimal so to gain more than 10% acceptances from a predominantly private investor base appears impressive.

The acceptance date has been extended to 12 December. The acceptance figure at that date will give more of an indication whether the initial acceptances are just shareholders unhappy with the past running of the business that are keen to get out of their investment or if there is some momentum being built up. Gladstone undoubtedly disappointed many investors under its previous management and this provides an easy exit for them. However, the new Gladstone management has at least developed a strategy although it is too early to judge how successful the move into the education market will be.

Gladstone’s board continues to reject the bid, which it believes is opportunistic and wholly inadequate. Gladstone points out that shareholders owning 21.2% of the company say that they will not be accepting the offer.

Constellation had to bid at least 25p a share because that was the price at which it bought all or most of its stake. Even if it had to increase its bid to get over the 50% acceptances figure the fall in the pound means that, in dollar terms, Gladstone could still be a lot cheaper than when Constellation bought its stake in March. Constellation will also save the costs of Gladstone’s quotation if it succeeds.

Gladstone shares rose 1p to 24p each.

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