Activist investor Elliott rumoured to have Micro Focus in its sights

Suse Linux spin-out or complete sale believed to be possible options
Thursday 19 Apr 2018 Author: Steven Frazer

Shares in Micro Focus (MCRO) have spiked higher after reports that activist investor Elliott is building a stake. While the size of any investment remains unknown and Elliott’s intentions unclear, stock market gossip suggests that Elliott plans to push for major changes at the FTSE 100 enterprise software business.

This could involve Micro Focus spinning out its Suse Linux business acquired as part of its Attachmate acquisition in 2014. Alternatively, Elliott could try to force the sale of the entire company, probably to a private equity investor.

Micro Focus’ shares are trading at £12.76, close to their highest level since collapsing in March after revealing integration issues with its $8.8bn HPES acquisition.

Meanwhile Elliott has exited its long held position in GAME Digital (GMD), the video games hardware-to-software retailer closely aligned with shareholder Sports Direct International (SPD).

It has disposed of its 36.98% stake in GAME, attempting to morph from a seller of physical games into a gaming experiences provider, eliminating a large overhang in the stock. (SF/JC)

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