Tuesday, 2 June 2009

Financial buyer stalks Micro Focus bid for Borland

(By Philip Carnelley – Tuesday 2nd June 2009 7:30am). Micro Focus announced yesterday that a "financial buyer" has expressed an interest in Borland. Micro Focus already has an agreement to buy the troubled US-based application development tools player (see Busy day for Micro Focus!). Obviously Borland’s directors have to look at any other offer, but we think their main goal will be to sell the company as quickly as possible before the money runs out. Indeed that’s the most likely reason Borland’s CFO was promoted to CEO earlier this year, when the previous incumbent left. Borland’s Board have unanimously recommended the Micro Focus offer.

We’re not sure what value another company would see in Borland. It has $40m in cash, but revenues are falling fast and in the last financial year it lost $210m at the operating level on revenues of just $170m. To buy it for its maintenance and service revenues (which are falling too, by the way) at a price significantly higher than the $75m Micro Focus has offered would be quite a brave move. There are a few companies out there who might want to include Borland’s rather disparate “application lifecycle management” offerings in their own portfolios. We wait with interest to see if another bidder really emerges, or if this is just a ploy to get Steve Kelly to up the ante.

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