(Alliance News) - Checkit PLC on Tuesday released details of a GBP12 million bid approach for Crimson Tide PLC which it said had been "unequivocally rejected".

Under the terms of the all-share deal, Checkit would offer 7 shares for every one held in Crimson Tide.

Based on Checkit's closing share price of 26 pence on Monday this would value each Crimson Tide share at 182p.

Shares in Crimson Tide, the Kent, England-based software developer and provider of the mpro5 solution, rose 5.9% to 172.00p in London on Tuesday morning, giving it a market capitalisation of GBP11.7 million.

Checkit, the Cambridge, England-based workflow management software provider, said Crimson Tide would hold around 30% of the enlarged group.

Shares in Checkit fell 7.3% to 24.10p, giving it a market capitalisation of GBP26.0 million.

Checkit said a deal offered a "compelling strategic opportunity" to create a scaled workflow software company which would present a "more attractive investment opportunity for all shareholders than either business as a standalone entity."

Checkit said this, along with the "significant" potential revenue and cost synergies, could result in the enlarged company attracting a wider pool of investors and consequently being attributed higher valuation.

Checkit said it had, at various times, over the last four years sought to engage in constructive discussions with Crimson Tide, but those talks have never progressed.

Checkit said Crimson Tide "unequivocally rejected" a proposal, in line with the terms unveiled on Tuesday, in January. Checkit approached Crimson Tide once more in April, but was again rebuffed.

Therefore, Checkit said it had decided to publish the terms of the proposal so it could begin direct talks with shareholders in both companies.

"Naturally, the Checkit board would welcome the opportunity to engage in dialogue with the Crimson Tide Board on the merits of a combination of the two businesses but will be mindful first and foremost of feedback from both sets of shareholders when deciding whether or not to proceed with a firm offer even if it does not receive a unanimous and unqualified recommendation from the directors of Crimson Tide at any point," Checkit said in a statement.

By Jeremy Cutler, Alliance News reporter

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