nCipher receives bid approaches

Data encryption group nCipher shares rocketed by over 50% last week – on Friday they reached a high of 181p - after it confirmed that it had received a number of preliminary approaches "that may lead to an offer being made for the company". Putting this into context, though, nCipher shares had been at 270p in mid-2007. The FT (12th Apr 08) reported that “Simon Strong, an analyst at KBC Peel Hunt, said likely bidders might include IBM and EMC, which may be interested in adding more encryption expertise to their security portfolio.” By the close on Friday, the share price had slipped back considerably to 135p. (Note- Looks like nCipher shares are heading back up to Friday's highs in very early Monday morning trading)

Two years back – in 2006 - a takeover bid from SafeNet, a US rival, sent nCipher’s shares to 300p when the bid was first announced. However, the bid was withdrawn after the proposed deal was referred to the Competition Commission. The SafeNet bid prevented Ncipher from concluding its own acquisition of Abridean, a software company, and meant that the company incurred significant legal costs.