Bravura shares plummet after takeover negotiations cease, but company says strategy on track

Software company Bravura Solutions saw its shares plummet more than 20% yesterday, after the board announced its attempts to find a buyer were unsuccessful.

The move comes just six months after the company announced it rejected a takeover offer from an unknown buyer – reported to be private equity firm Duke Street – that would have valued Bravura at between 17.5-20 cents per share.

Yesterday Bravura shares have dropped more than 20% to 15c, despite previous speculation of a buy that sent shares up to a 52-week high of 24c earlier this year.

“The Bravura board of directors received a number of unsolicited indicative proposals. None of the indicative proposals has resulted in a binding offer or proposal, either capable of implementation, or of being put to shareholders,” it said yesterday.

But chief financial officer Rebecca Norton told SmartCompany this morning the offers simply didn’t satisfy any of the company’s internal requirements.

“This was purely just going through indicative proposals,” she says, adding the company will be fully able to implement its strategy by going alone.

“This situation won’t change anything, and as the announcement did say, our strategy is that which we revealed at the half-year announcement and the board is obviously supportive of that.”

Any deal involving Bravura will need the approval of private equity firm Ironbridge, which maintains a stake of just under 50%.

However, Norton points out the IT market is still experiencing some tough times, saying the company is “cautious” about the current state of the market.

“I don’t think it’s back to the days before the global financial crisis, to be sure. I guess optimistically cautious would be the best way to put it,” she says.

Bravura, which supplies wealth management software, has experienced a few tough years. Last year it saw chief executive Iain Dunstan resign, handing over to co-founder Simon Woodfull, although the firm told SmartCompany at the time there was a good relationship between the two.

Last year, the company’s share price fell below 10c, compared to a price of $2.10 back in 2007. It also recorded a $13.2 million loss for 2009-10, compared with a profit of $1.6 million for the previous corresponding period.

However, Bravura seems to be improving – just recently it recorded an after-tax net profit of $1.73 million for the first half of the current financial year.