CGE&Y has made an all-share public offer worth $15.09 (E12.96) per share, which values the company at approximately (E244 million) $284 million.
Even though the premium appears small, Transiciel’s market capitalization was only $170 million (E146 million) before CGE&Y revealed its interest two months ago. That admission followed CGE&Y’s decision in July to raise $535 million (E460 million) in funds through issuing new debt.
Transiciel’s full-year 2002 sales of E565 million give it a price/sales ratio of 0.43, lower than the current market value/sales ratio of its larger French competitors Unilog SA [UNLG.PA] (0.85) and Steria SCA [TERI.PA] (0.46). It is also lower than the 0.56 ratio which Atos Origin’s [ATOS.PA] $1.47 billion bid for the services arm of SchlumbergerSema represents.
Analysts have been sceptical about the deal, arguing that CGE&Y would be better off concentrating its acquisition energies on boosting its outsourcing revenue. Transiciel currently only makes 30% of its sales from outsourcing, about the same as CGE&Y.
Assuming it can get support from 67% of Transiciel’s shareholders it will merge the company’s 7,400 employees into its Sogeti unit.
Meanwhile, it’s been reported that Hewlett-Packard [HPQ] is still interested in bidding for CGE&Y.
This article was based on material originally published by ComputerWire.
