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Sage has tabled an offer for Softline, valuing the South African-owned accountancy software provider at £66m. Should it succeed, the cash offer will be financed from existing debt facilities, Sage says.

As well as its home turf, Softline commands good market share in Australia. The company had cash reserves of £11.1m as of March 31, so its so-called enterprise value is £54.9m. So in effect, the bid values Softline at annual turnover. For the year to March 31, the firm made an operating profit of £7.3m on sales of £53.5m. Softline also had net assets of £44.2m - if they were "real" net assets, Sage would have had to make a much higher bid to reflect this.

As it is, the bid is pitched at 6.4 per cent higher than July 31's closing price, and a more attractive 26.6 per cent higher than Softline's closing price on June 24 when Sage said it was mulling over making an offer.

Softline has something called an independent process committee which will consider the bid. It is subject to the usual shareholder and regulatory approval. ®

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