Friday 22 February 2019

Activist investor ups stake in Micro Focus International

The size of Elliott’s previous holding was not formally disclosed.

Elliott has upped its stack in Micro Focus International
Elliott has upped its stack in Micro Focus International

By Kalyeena Makortoff, Press Association Chief City Correspondent

Activist investor Elliott Advisors has upped its stake in Micro Focus International, ratcheting up the pressure weeks after the software firm warned on sales and lost its chief executive.

Elliott has bought enough shares in the firm to take its stake to 5.1%, according to a market announcement on Monday.

Reports emerged earlier this month that it had built up a position in Micro Focus, though the size of Elliott’s previous holding was not formally disclosed.

The software firm’s shares rose as much as 1.8% on the back of the news.

Micro Focus International declined to comment.

The move comes after Micro Focus revised its annual revenue guidance to between minus 6% and minus 9%, compared with minus 2% and minus 4%, after seeing revenues drop at a faster rate than expected at the start of the year.

The group – which sealed a £6.8 billion takeover of Hewlett Packard Enterprise’s software business in September – also announced that chief executive Chris Hsu was quitting to “pursue another opportunity”, six months after taking the role.

He was immediately replaced by chief operating officer Stephen Murdoch.

Micro Focus said its sales teams were impacted by the introduction of a new IT system, while former customer accounts of Hewlett Packard Enterprise were disrupted by its merger with the firm’s software arm.

However, it said its cost savings drive was ahead of schedule and net debt was expected to be in line with expectations.

Shares in Micro Focus took a major blow in recent months, having lost 47% of their value since the start of the year when the firm warned that its half-year results would miss expectations.

The group has already taken steps to shore up its fortunes by recruiting ex-ARM Holdings and easyJet executive Chris Kennedy as chief financial officer.

Press Association

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