Alphyra shares increase almost 2% on news of indicative bid

US group First Data yesterday made an indicative bid for Alphyra, valuing the electronic transactions firm at €90 million.

The indicative bid of €2.80 in cash per share, which is subject to two conditions, is 35 cents higher than a formal bid last month by a management team. Shares in the company rose 1.89 per cent yesterday to €2.70 on news of the indicative offer.

Shareholders were advised by Alphyra's two independent directors not to take any action pending clarification of First Data's intentions. Alphyra's closing price the day before the management approach was announced was €1.55. The independent directors - Mr Nicholas Koumarianos and Mr Grant Wilkinson - said in a statement yesterday that discussions with First Data were at an advanced stage.

The development follows comments last week from Alphyra's management team that a First Data offer would be regarded as "hostile and most unwelcome".

This led the independent directors to state that any offer for the firm that would increase shareholder value would be welcomed.

Confirming the indicative bid yesterday, the independent directors said a more detailed statement would be made no later than February 5th. However, they added that there could be no assurance that a formal offer would be made.

The 10-member management group, which includes chief executive Mr John Nagle and finance director Mr John Williams, made no comment yesterday.

Backed by Benchmark Capital, the group's bid was supported just before Christmas by Mr Koumarianos and Mr Wilkinson, although they noted that another group had entered the frame. While certain informed observers questioned why First Data had not tabled a firm bid, yesterday's statement suggests that such a development is very likely. A US spokesman for First Data did not return a call.

The independent directors said the indicative offer was subject to a satisfactory review of the final due diligence issues. While also subject to approval by First Data's board, the bid was authorised by its executive committee, including its chairman and chief executive.