A Lazard source said a large European software company was in the running but would not comment further.
Cegid’s three largest shareholders, ICMI (20.09%), which is controlled by Cegid’s chairman Jean-Michel Aulas, Apax Partners (17.07%) and Eurazeo (9.09%) were described as sellers by one source familiar with the situation. Aulas is almost 60, the founder of the company but also the president of the football club Olympique Lyonnais and he came to the decision that it was time to sell, this source said.
A second source familiar with the situation cited large ERP (Enterprise Resource Planning) players such as Oracle, SAP and Sage as potential bidders for Cegid. But this source added that the bigger players such as Oracle or SAP have not been showing a lot of interest for middle-sized acquisitions in Europe.
Sage is looking to spend GBP 400m on European acquisitions and has targeted France as a core area of interest to grow its accounting software business, said a company insider. He did not comment on speculation linking Sage to Cegid.
The Sage insider said: “With net debt of USD 1.1bn at the end of 2007, we have plenty of room for acquisitions.” In 2005 Sage acquired two French companies, Adonix for GBP 78m and Cogestib for GBP 7.7m. Meanwhile, Sage CFO Paul Harris refused to say if Sage is among the bidders lining up for Cegid.
Interest is more likely to come from US tech PE firms based in London and it is unlikely that big US strategic players will pay a big premium, the second source said.
This source said that an offer price of EUR 55, or even higher as it has been mentioned, could prove too high for a player that would not be able to create synergies, i.e. a financial player.
However, a sector banker said he had heard that Consona had made a EUR 55 per share approach, valuing the company at EUR 500m, but he believed this needed to be at least EUR 60 per share to attract Cegid’s shareholders. He said: “This could just be bait for a large European group like Sage to offer a more substantial offer.”
Two analysts agreed with the sector banker that Sage would be the likely buyer to acquire the three main shareholders’ stakes.
The first source added that there was no shareholder agreement between Aulas, Apax and Eurazeo for the sale of the company.
This source said that the preferred bidder for Cegid would have to launch a public offer if it acquired the shares of the three main shareholders, as it would then own more than 33% of Cegid. Although the combined stakes of the three main shareholders would give the buyer a stake of about 46% stake and not a controlling interest, the source said that it was very unlikely that this bidder would try to acquire a stake in Cegid prior to the acquisition of the 46%, as there could be insider trading risk attached to such a move. Owning 46% means that there would be very little risk for a counter bid, the source added.
This first source also said that a deal would probably be referred to relevant national competition authorities but that there should not be major competition issues, although this could not be totally ruled out before the identity of the buyer was confirmed.
Press reports have mentioned Hellman & Friedman as well as US group Consona as potential bidders.