Micro Focus’s executive chairman has dismissed a sharp drop in the technology company’s shares as investors nervously approached its huge takeover of Hewlett Packard’s software division. The FTSE 100 group’s share price fell by 8.1pc despite its full-year results being in line with market expectations, with shareholders wavering ahead of the $8.8bn (£6.8bn) acquisition of HP Enterprise Software, an arm of the US tech giant. The takeover, which is due to go through on September 1, will be one of Britain’s biggest ever technology deals, with the HP business accounting for more than half of the combined company’s revenues. Shares have fallen in recent weeks amid slower-than-expected trading at HPE Software and ahead of an expected sell-off as American funds that do not own foreign shares sell their existing stakes. On Wednesday they fell further after the company reported like-for-like revenues falling by 0.9pc to $1.4bn and pre-tax profits rising slightly to $196.3m. While they were in line with expectations investors took the results as an opportunity to sell shares. MICRO FOCUS Kevin Loosemore, Micro Focus’s executive chairman who masterminded the HP deal, said there was “no logical reason” for the drop in the share price, and pointed out that shares had risen from £1.30 when it floated in 2005 to £20 today. He said analysts suggesting that management had taken their eye off the day-to-day running of the company as they work on integrating the HP business “don’t have a clue what they’re talking about” and insisted there was a “general buzz” about the company. In September Micro Focus agreed to buy the software division of HP Enterprise, one of the two companies created when Hewlett Packard split in 2015. The business contains many of the assets owned by Autonomy before the British tech company was sold to HP in 2011. When the acquisition is completed, HP Enterprise shareholders will own 51pc of the combined company but many are expected to sell them either because of US rules or to cash in on the deal. Mr Loosemore said Micro Focus bosses had talked to all of HP Enterprise’s major shareholders. “We’ve been explaining what we do, most of them understand the model, I think what we do quite appeals to them,” he said. Job losses at HPE Software are expected once the deal closes. Mr Loosemore said the company was talking to unions in Germany and France, which have strict labour laws, ahead of making any moves.
Information technology corporation Hewlett-Packard