Embattled derivatives-trading software company, Patsystems, saw its shares rocket 33% as it announced a cash approach by largest shareholder ION Trading (ION), an international electronic trading and risk management player. The proposed offer values Patsystems at 14 pence per share, and the company at c£29m. Patsystems responded very positively to the approach, noting Patsystems’ ‘strong commercial fit with ION, their greater financial stability, as well as the potential benefits to staff, customers and product development.’ ION has until 26 December to make a firm offer for the company.
Looking at Patsystems’ current predicament it’s not hard to see why management are so keen. Its shares have slumped since it announced earlier this month that it would face a £300k shortfall from its largest client, collapsed US broker MF Global (see here). This now looks set to be even worse than previously thought. Patsystems said that MF Global now owes it £900k, and the shortfall will hit full year profits by £500k. For Patsystems, ION’s approach is clearly a very welcome piece of good news. Fingers crossed a firm offer is now forthcoming.