Microgen offer for Trace lapses. Tulip wins Trace

It has just been announced that Microgen's 180p offer for Trace failed to get the required level of shareholder acceptances and has therefore lapsed. By the closing time today, Microgen had received acceptances from only 45.7% of shareholders.

Martyn Ratcliffe, Chairman of Microgen, said:

"The Microgen Increased Cash Offer represented a significant premium over any other offer made to Trace Shareholders and was unanimously recommended by the Independent Directors of Trace. It is disappointing and highly unusual that such a unanimously recommended offer was compromised by the undertaking provided by one of the Independent Directors to an ultimately unrecommended competing offer."

Tulip (the MBO vehicle bidding for Trace and intending to take it private) has also just announced that they had received acceptances for their 156p offer for 48.87% of the shares. However, they had bought 169,481 shares in the market today. So, including them, they represented 50.06% and the offer has been "declared unconditional in all respects".

It must be a bitter disappointment for Microgen and Ratcliffe in particular. He seems to get spurned too often. I never doubted the logic of the move on Trace. I just doubted Microgen's ability to generate organic growth from the coupling. Exactly what Microgen will do next is also questionable. If I was them, I'd start a sale process for the company right away - whether as a whole or in bits. Thereby returning as much as is possible to its shareholders.