25 May 2012

Patsystems receives £29m bid approach

28/11/2011 Miles Nolan

Shares in Patsystems (PTS) have soared 32 per cent this morning, on news that its largest shareholder ION Trading has approached the trading systems supplier with a 14p a share cash bid.

AIM listed Patsystems acknowledges the commercial logic of joining forces, not least due to the greater financial stability of ION and the likely benefits to staff and customers, as well as product development. With a 27.91 per cent stake, the software giant certainly has a strong seat at the table.

Patsystems has also warned that the collapse of MF Global, its largest single client is likely to hit profits by £500,000 this year. Clients of the stricken US brokerage are shifting their accounts to rival providers (including other clients of Patsystems), but due to the multi jurisdictional nature of the business, this process is taking time.

Last month Patsystems stated that £300,000 was owed by MF Global, this figure has now trebled to £900,000. Talks are underway to recover the cash but there is no certainty that the sum will be recovered entirely. In light of the current economic environment, the firm is also planning to take provisions of £600,000 to £1.3 million in respect of one significant exchange customer.

On a more positive note, Patsystems argues that the acquisition of Mixit earlier this year has gone well, and that trading in 2012 should show a considerable improvement on the current year. With the shares at 12.75p, shareholders should sit tight.

Tags: AIM market, Cash bid, ION Trading, MF Global, Offer approach

Sector: Support Services

Companies: Patsystems

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