DARMSTADT (dpa-AFX) - Technology investor Silver Lake has increased its offer for the planned takeover of Software AG in the face of a counter-offer - but remains below the latter's rumored high. The Americans are now offering shareholders 32 euros per share and still have the company's support. Shortly before, it had become known on the previous evening, according to a report by the news agency Bloomberg, that the financial investor Bain Capital probably offers 34 euros and wants to merge the Darmstadt-based company with its software company Rocket Software. Shareholders had already speculated on a bidding war anyway - on Friday, the share fell after the start of trading.

The SDax-listed stock was last down just under 3.7 percent in the morning at 33.94 euros. On the previous evening, the share price had closed above 35 euros - apparently investors had hoped for a premium on the Bain offer from Silver Lake. The bids are both significantly higher than the share price before the takeover plans became known; at the time, the share was trading at around 20 euros. In late summer 2021, however, the share was still worth 44 euros at its high, and in September 2020 even a few cents more.

Two weeks ago, Silver Lake put an initial offer of 30 euros on the table and had already secured a large block of shares from its major shareholder, the Software AG Foundation. In addition, the Californians bought 5 percent on the market, thus increasing their share to 30.1 percent. According to the latest voting rights notifications, Bain Capital holds a good 10 percent of the voting rights indirectly - 4.5 percent directly via the portfolio company Rocket Software. Bain has secured access to another 5.5 percent through financial instruments.

Software AG continues to support Silver Lake's offer, the company said of the increased bid. The software specialist confirmed the existence of another offer, but did not give any names or conditions. The Darmstadt-based company stressed its intention to recommend that shareholders accept Silver Lake's increased offer. The Management Board and an independent takeover committee formed on behalf of the Supervisory Board had examined the "non-binding" counter-offer - which was subject to certain conditions that could not be met. On this basis, however, the new offer was negotiated with the investor Silver Lake.

Software AG CEO Sanjay Brahmawar had admitted around the time the first takeover offer by Silver Lake became known that he had not sought further offers from the market. "Silver Lake has already demonstrated strong support for our strategic vision and values," the executive had said. Company co-founder and foundation chairman Peter Schnell called Silver Lake an "ideal partner."

Silver Lake is advertising that Software AG will remain an independent company and continue to be headquartered in Germany. The investor himself stated that he was not interested in a partnership with another party that could support or demand a sale to a foreign competitor and the detrimental social effects that would entail.

The financing of the offer, which is now worth 2.4 billion euros as a result of the increase, has been secured, the statement added. In addition, the Software AG Foundation could not withdraw from the purchase agreement for a good quarter of the shares. The agreement with the foundation is also not dependent on reaching the minimum acceptance threshold of the offer of 50 percent. Ultimately, Silver Lake wants to take Software AG off the stock market and reportedly support the group's expensive conversion to a subscription business model.

Bain's rumored offer of 34 euros is worth about 2.5 billion euros. According to the Bloomberg news agency, hedge fund Elliott is also getting involved and has bought a block of shares - the amount is not known. Notification of voting rights is only mandatory for shares of more than three percent. Elliott boss and US star investor Paul Singer is known for buying into ongoing takeovers and wanting to earn money from them.

Although Bain is keeping a low profile on its own intentions, ultimately the deal involves a merger of its own company Rocket Software and Software AG. Among other things, Rocket Software is active in the field of database software. Software AG grew up with the database business and still operates it, but has meanwhile shifted its focus to integration software for the interlinking of different IT systems.

A merger of two companies could create a larger, more powerful provider or ultimately result in a breakup. According to its own statements, Silver Lake is striving to make the company stronger and more profitable over the coming years, away from the spotlight of the stock market. In the end, however, there could be an exit to make money - as is the business model of financial investors. The acquisition is expected to take place this year, and Software AG expects the deal to close in the fourth quarter.

Silver Lake is known as an investor in technology companies; among other things, the Americans also want to take over SAP's market research subsidiary Qualtrics together with the Canadian pension fund CPP Investment in a billion-dollar deal.

Silver Lake had already invested in Software AG in 2022 via a convertible bond. Since then, the investor has provided two members of the Darmstadt-based company's supervisory board, Christian Lucas, the company's chief supervisor, and James Whitehurst, an IT expert. According to official statements, the two are staying out of the takeover process because of the conflict of interest. However, they know the company well through their committee work./men/tav/stk