Management hostility drove off Alphyra bids

Potential  bidders for Alphyra were discouraged by the hostile attitude of the company's management, who are mounting their own buyout, according to US investment industry sources.

Alphyra, which sells electronic transaction systems, could have attracted more than one US bid if management had not treated such approaches as "hostile", they said yesterday.

First Data, the sole US company to make an indicative offer for the MBO target, yesterday withdrew from the bidding process, leaving management's Rendina vehicle as the only remaining player.

Shares in Alphyra shed 14 per cent on the news, closing down 38 cents at €2.32, below Rendina's €2.45 offer.

Analysts said the offer, which reaches its first closing date on February 5th, is now likely to be successful.

Rendina's path is not entirely clear, however, with at least one large shareholder signalling an intention yesterday to oppose the €80 million MBO offer.

A spokesman for the New York-based Kaufmann Fund, which holds 7 per cent of Alphyra's shares, said the fund would reject the offer on the grounds that it represented poor value for shareholders.

The spokesman raised questions about management's approach to competing offers, suggesting that further bids may have been "inhibited" by hostility, saying he believed Alphyra could have attracted up to €3.00 per share in different circumstances. First Data had been prepared to offer €2.80 per share until yesterday.

Meanwhile, Mr Paul Garcia, chairman and chief executive of Atlanta-based Global Payments, confirmed yesterday that his company had considered making a bid for Alphyra but had not proceeded because management had not invited such a development.

"We are not interested in doing something that would be perceived as hostile," he said. Mr Garcia added that Global Payments was "still having dialogue" on the issue.

It is believed that another US company, Kansas-based Euronet, is also continuing to monitor developments at Alphyra, possibly with a view to making a bid.

Alphyra's independent directors, Mr Nicholas Koumarianos and Mr Grant Wilkinson, have expressed disappointment at First Data's exit from the bidding process. In a statement, they drew shareholders' attention to Rendina's offer, which they first recommended before Christmas.

Neither First Data, nor its adviser, Lehman Brothers, was prepared to comment on the company's decision to withdraw its bid, which Alphyra management had treated as "hostile and most unwelcome" from the start.