Silver Lake on Wednesday kicked off a tender offer for Software AG shares, at 32 euros ($34.60) a share. The tech-focused private equity firm has the backing of Software AG’s executive leadership and its largest shareholder, which agreed to sell a 25 percent stake in the company to Silver Lake.
Together with a 5 percent stake that the firm acquired in the open market, Silver Lake owns about 30 percent of the German company. For its offer to succeed, the firm needs to acquire at least 50 percent plus one share of Software AG’s outstanding stock.
Bain Capital is challenging the deal. The private equity giant — through the portfolio company Rocket Software that it hopes to combine with Software AG — has made a series of unsolicited takeover bids that it says are better for the German firm’s shareholders. (That campaign led Silver Lake to increase its takeover bid from €30 a share.) Bain is offering €34 a share, with the possibility of going higher.
It is rare to see private equity firms, which generally seek friendly deals, pursuing an unsolicited takeover offer that management has opposed. A representative for Rocket told DealBook: “We believe that this proposal is a very good proposal for both companies, and we look forward to engaging with management.”
Other investors are pushing back against Silver Lake’s offer, which they say undervalues Software AG. At the German company’s annual investor meeting on Wednesday, some spoke out against the bid. “Cooperation with Silver Lake must not lead to competing takeover bids being nipped in the bud to the detriment of all other shareholders,” said a representative for investors who collectively own about 5 percent of Software AG.