Wordplex Information Systems Plc last night totally rejected a share exchange offer from Apricot Computers Plc which nominally values the Slough word processing systems manufacturer at UKP14.7m. The offer is hedged about with a string of conditions designed to force Wordplex and its holders into a quick decision, and it appears that these are the sticking point for Wordplex. The Apricot offer, which includes a cash alternative of 130 pence a share puts a UKP13.25m floor on the value of the company, and, despite the rejection, effectively stymies the Wordplex restructuring and rights issue that would have seen Octagon Industries Ltd moving in to manage the company, and Close Investment Management acquiring a 25% stake in the company at a knockdown 50 pence a share – Chase Manhattan Securities alone speaks for 25% of the Wordplex shares and will accept Apricot’s terms in the absence of a higher offer. Apricot is offering 13 new shares of its own for every 10 Wordplex outstanding – representing 143 pence a share on Friday’s closing price of 110 pence, at which time Wordplex stood at 130 pence. Explaining the rejection, Octagon’s Dr Alex Reid declared Apricot is trying to mug Wordplex while it is in the gutter: we will start getting it out of the gutter next Monday. Shareholders should vote the money in because they will get a better deal from a position of strength. If the Apricot bid does succeed, it will follow up with a cash call to shareholders to raise UKP7.5m as a first step to paying off the Wordplex debt burden, at UKP1.00 a share, on the basis of one new share for every 7.696 held, or any other number of new shares the holder may choose: the provisional rights issue is underwritten by Barclays de Zoete Wedd and Singer & Friedlander. Just as notification of the Apricot offer was being delivered to Wordplex, Wordplex was putting out a statement saying that it had decided to build its future product line around systems bought OEM from Convergent Technologies Inc – but that the agreement is conditional on the proposed restructuring and rights issue being approved at next Monday’s extraordinary meeting. Apricot clearly will not need the Convergent products if it acquires Wordplex, but says it may decide to add them to the product line any way. If it succeeds in its bid, it intends to sell the overseas Wordplex subsidiaries but retain the rest of the business. The combination of Apricot – already expanded by the acquisition of DMS Microsystems from Extel – and Wordplex, would create a company with annual sales approaching UKP150m. Separately, Apricot reported pre-tax profits for the year to March 31 of UKP4.0m on sales down 21% at UKP71.2m. Background to the battle, and full Apricot figures – see page three.
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