Logica shares soar on £1.7bn offer, with counter-bid now on the cards

SHARES in IT firm Logica soared as traders speculated that a rival bid could trump yesterday’s £1.7 billion takeover offer for the UK-Dutch firm from Canadian peer CGI Group.

CGI is looking to build a global business by expanding its North American operations into Europe and has offered Logica investors 105p a share in cash.

The offer – a 60 per cent premium to struggling Logica’s closing share price on Wednesday – values the former FTSE 100 company at £1.7bn. However, yesterday’s close at 110.9p suggests some investors anticipate a counter-bid from the likes of Cap Gemini or Accenture.

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Directors and shareholders representing nearly 18.2 per cent of Logica’s equity have agreed to accept the offer from CGI, which generates most of its £2.8bn of revenues in North America. CGI chief executive Mike Roach described Logica as “a perfect fit” for his company.

The implication is that the deal should not result in massive job losses, though Logica does expect redundancies at its head office in Reading.

According to its website, Logica employs 350 people in Scotland from bases in Aberdeen and Edinburgh, where the company focuses on the energy, financial and public sectors. However, Logica yesterday declined to confirm whether that number is still accurate following a recent round of redundancies.

Logica issued two profit warnings last year as public sector cutbacks and the deteriorating situation in Europe slashed pre-tax profits to £32.7 million against £192.9m. In December, the firm said it would shed 1,300 staff, including some 300 in the UK.