Alphyra's management team, backed by Benchmark Capital, has offered €2.45 per share for the company but faces the possibility that a rival bidder could emerge.

The offer, which values the electronic transactions business at around €80 million, has been recommended by the company's two independent directors.

But they said they had been approached by another party expressing an interest in the company. "Discussions with this party are at a very preliminary stage and there can be no guarantee that this approach will result in an acceptable offer for the company," independent directors Mr Nick Koumarianos and Mr Grant Wilkinson said.

Alphyra shares closed 45 cents higher at €2.50 last night, suggesting the market has not ruled out the possibility that a rival bid could emerge. However, one analyst noted that any rival bidder would be handicapped by the involvement of the entire management team in the management buyout (MBO).

Meanwhile, Benchmark acquired more than two million shares, or 6.9 per cent of Alphyra's share capital, in the market yesterday, at prices between €2.10 and €2.45. When added to management's 5.8 per cent shareholding, this takes the stake controlled by Rendina, the MBO vehicle, to just under 13 per cent.

The 10-member management team involved in the bid will re-invest around €3.5 million of their net cash proceeds from the offer for shares in Rendina. They include chief executive Mr John Nagle, who owns 5 per cent of the company, finance director Mr John Williamson and chairman Mr John McDonnell.

To finance the rest of the offer, Benchmark Capital has agreed to invest €30 million for shares in Rendina and to lend up to €34 million to the company under a convertible bridging facility.

Further bridging loan facilities of €15 million have been made available by IIB Bank.

The €2.45 per share offer is above the €2.00 first mooted when the management approach was announced but falls slightly short of the figure of around €2.50 sought by most institutions.

The price offered represents a premium of 58 per cent over Alphyra's closing price of €1.55 on the day before the MBO approach was announced.

It is also 82 per cent above the average closing price of Alphyra shares in the three months prior to the offer.

However, it's a long way off the company's all-time high of €22.10, reached at the height of the technology boom.

Analysts said shareholders were likely to wait and see whether the alternative approach developed into anything concrete before committing themselves.

The company's major shareholders include Newton Asset Management, with a 10.5 per cent stake, and Prudential, with around 8 per cent.