Shareholders in infrastructure software company Micro Focus (MCRO) could be in line for a return of value worth up to 295p per share, worth almost a quarter of the value of the current £12.77 share price.

This is the amount being modelled by analysts at broker Numis following the FTSE 100 software company’s $2.5bn sale of its SUSE business to private equity firm EQT.

The SUSE operation provides various open source tools for the enterprise market. It was acquired in 2014 by Micro Focus as part of its $2.35bn deal to buy Attachmate.

At the time SUSE contributed around 20% of Attachmate revenues. Subject to shareholder approval, the sale of SUSE is expected to complete in early 2019. If it does it would ‘demonstrate management’s ability to generate significant value,’ says Numis analyst Will Wallis.

He is not alone in highlighting an impressive return on capital for shareholders of this deal.

‘The valuation is ahead of our sum of the parts estimate and represents a good deal all round,’ says George O’Connor, analyst at broker Stifel. ‘We think there will be a return of value to compensate investors for the dismal share price performance this year,’ adds O’Connor. We don’t yet know if any return would be in the form of a special dividend or share buyback or both.

Micro Focus’s shares had previously slumped from levels near £19.00 in March after reporting integration issues with its HPES acquisition. (SF)

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