Shares slip 5.2 per cent
The $8.8bn reverse takeover by LSE-listed Micro Focus, which hit the headlines in September, represents yet another piece of HPE that CEO Meg Whitman has deemed surplus to the firm’s future.
HPE Software is due to be fully assimilated by the end of July, with the Committee on Foreign Investment in the United States having given the transition the thumbs-up, Micro Focus told the stock exchange today.
Further, investors in Micro Focus were asked to attend an annual general meeting to rubber stamp the deal, described as a spin merge by HPE.
“Shareholders will also be asked to approve a $500m return of value, approximately $2.09 per share,” the statement to the City added.
The software division at HPE is made up of a collection of separate units including Autonomy, Mercury Interactive, ArcSight, three businesses that alone cost HPE more than $16bn to acquire. Other elements include Vertica (buy price undisclosed) and relatively smaller IT management ops outfits.
The business has shrunk in recent years, with turnover dropping from $4.06bn in fiscal 2012 ended 31 October to $3.19bn in fiscal 2016. Profit before tax during that period slipped too. In HPE’s Q1 ended January, sales in the software arm fell 8 per cent year-on-year to $721m.
In a trading update about the latest quarter ended 30 April, Micro Focus said HPE Software revenues had slumped 10 per cent on the prior year quarter when they came in at $774m, indicating sales were $700m.
Licences and professional services declined and support and SaaS were flat, Micro Focus said.
Micro Focus is considered by some to be something of a retirement home for software businesses that have seen better days. Buys have included The Attachmate Group (Attachmate, NetIQ, Novell and SUSE lines) and certain products from Progress Group. Micro Focus said it expected sales for the year ended 30 April 2017 to be flat or reduced by 2 per cent.
Micro Focus shares slipped 10 per cent this morning but had recovered and were down by around 5.2 per cent at the time of writing. ®