LONDON — Fluid flow simulation specialist Flomerics Group plc (Hampton Court England) has rejected a cash offer from EDA giant Mentor Graphics, saying it undervalues the company.
Flomerics added it intends to explore other alternatives, including potential interest expressed by other parties, though it stressed there is no certainty other buyers would come forward with a bid.
Mentor maintains the offer values Flomerics at £25.5 million ($49.7 million) which represents a premium of 19 percent to the closing price of 89 pence per Flomerics share on May 8.
"The offer was considered by the board of Flomerics, in conjunction with its independent advisers, and it was unanimously concluded that this offer, which is unsolicited, does not reflect the true value of Flomerics shares," said chairman David Mann.
In March, Mentor acquired a further 6 percent stake in Flomerics, seeing its stake increase to 26 percent.
Mentor bought a first 20 percent stake in late February from Pricap Venture Partners AG and there were suggestions at the time that Mentor could be looking to acquire the AIM-listed company.
Flomerics staff and management speak for about a fifth of the shares in the company.
Flomerics announced in April record full-year turnover of £16.3 million ($31.8 million). Adjusted pretax losses amounted to £1.3 million.
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