Shares in educational software maker Riverdeep soared today on news that chief executive Mr Barry O'Callaghan had offered to buy the company.
Shares in the Irish-based company, which provides Internet and CD-ROM learning aids for US schools and online support for teachers, leapt 62 euro cents, or 83 percent, to 1.37 euros after it said Mr O'Callaghan had made an approach that might lead to an offer.
Riverdeep said it was in preliminary talks with directors led by Mr O'Callaghan and would make a further announcement in due course.
Riverdeep delisted from New York's Nasdaq exchange last month after suffering several broker downgrades amid mounting concern about its management. It has been criticised for failing to communicate adequately with the market over its performance.
The stock, which has slid from €4.90 a year ago, rose as high as €1.55 in early trading just days after hitting a year-low of €0.75 last Friday.
Several analysts said a buyout would have to be pitched at more than €1.45 a share to succeed, valuing the company at more than €330 million, nearly double its market capitalisation at the close of business last Friday.
"The company has been susceptible to some kind of approach for a while given the drop in its share price, and it was no secret that O'Callaghan was unhappy with the way the market viewed the company," said one Dublin-based analyst who declined to be identified.
He suggested other interested parties might also emerge. Another Dublin analyst, who also spoke on condition of anonymity, put the valuation at over 1.50 euros per share, representing a market value for the company of more than €340 million.
"I think we're probably at the bottom of the cycle in terms of the overall performance of e-learning companies in general, so I think for it to go through with any of the institutional owners of the company they'd need a premium," the analyst said.
Earlier this year, Mr O'Callaghan gave guidance for 2002 revenue of $200 million and profit of $50 million and said he expected 25 percent growth in turnover.