Should you buy Blue Prism (PRSM) shares after the new takeover bid?

Highlights

• Software company Blue Prism’s shares rose by 3 per cent on Wednesday after the group backed a new takeover bid offer by SS&C Technologies.
• The group had earlier backed a £1.22 billion offer from Vista Equity just days ago.
• The new offer is of £1.24 billion and is higher than Vista’s recent offer.

Software company Blue Prism’s (LON: PRSM) shares rose by 3 per cent on Wednesday after the group management switched its stance and backed a new takeover bid offer of £1.24 billion made by US-based fintech company, SS&C Technologies.

The group withdrew its recommendation from another takeover suitor Bali Bidco Limited, owned by Vista Equity, a US-based private equity firm.

SS&C's latest offer is an all-cash offer of 1,275 pence per share, higher than the earlier bid offers that Blue Prism has received.

Recent bidding war

Blue Prism had earlier agreed to a takeover bid offer of £1.22 billion from Bali Bidco Limited just days ago.  

Shareholders were scheduled to vote in a court meeting on 9 December for the offer. However, the company’s directors have proposed to adjourn the meeting in light of the Blue Prism Group’s acceptance of the new SS&C offer.

Bali Bidco’s last offer was at 1250 pence per share, a 50.2 per cent premium on Blue Prism's closing price as of 27 August. (27 August was the last business day prior to the beginning of the offer period.).

The 1250 pence per share offer was also higher than the 1200 pence per share offer made by SS&C last month. In late September, Vista had made an initial buyout offer of £1.1 billion.

Blue Prism’s (LON: PRSM) share price and performance

Blue Prism’s shares were trading higher by 2.39 per cent, at GBX 1,330.00 on 1 December at 13:11 hrs BST. The FTSE AIM UK 50 index (which it is a part of) was at 6,438.08, up by 0.89 per cent. The company’s market cap is at £1,261.49 million as of 1 December.

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Bidding war may continue

Analysts anticipate that the bidding war for Blue Prism could likely continue as Vista has reserved the right to make a counter bid offer.

Coast Capital, which holds a 2.8 per cent minority stake in Blue Prism, had earlier criticised Vista's last offer by saying it had undervalued the firm. Coast has, however backed SS&C’s latest offer, according to a Yahoo Finance UK report.

Blue Prism is an automation software firm which had helped automate the ordering of pandemic related Personal protective equipment (PPE) for the UK’s National Health Service (NHS) in 2020.