SunGard Data Systems Inc, the acquisitive US financial software house, has been forced to abandon its all share offer for Rolfe & Nolan Plc after a deluge of complaints from clients about monopolistic behavior. The bid was valued at $115m when announced in February. As Rolfe & Nolan expressed its disappointment at the news, its shares fell heavily, closing down a total of 37% to 300 pence since the news was announced on Friday. The board also issued a statement saying it would be reviewing its strategy. London-based Rolfe & Nolan specializes in the supply and support of back office settlement systems for the trading of derivatives; an area in which SunGard already has substantial numbers of customers. Clients of both companies, including leading investment banks, have written to the competition authorities in the UK and in the US to express their concerns about the lack of competition such a deal would create. The banks were worried that software prices would rocket after the merger. SunGard said it had attempted to allay these fears, but having received legal advice, it had decided to let its offer for the UK company lapse. At the time the deal was announced in February, Rolfe & Nolan had welcomed the opportunity to join a bigger player, as development costs for the company’s latest risk management application were stretching cash resources. Sales of the product, named Lighthouse, were not picking up. The company has doubled its revenues to 20m pounds in the last four years, putting pressure on working capital. Rolfe & Nolan is due to report its year end figures next month.
