Merger of Sage and Pegasus cancelled

Merger of Sage and Pegasus cancelled

Accounting software developers Sage and Pegasus have called off merger talks after legal advisers warned that the deal faced referral to the Monopolies and Mergers Commission. The tie-up would have given Sage more than half of the SME market for accounting software and around 35% of the market as a whole, according to independent estimates.

Analysts described the end of talks as ‘good news’ for end-users. Jyoti Banerjee, managing director of Tate Bramald Consultancy, said: ‘Users are the only people who stood to lose out, because the deal would have reduced competition.’

Pegasus, which rejected an offer from Sage in August, began serious talks after Sage upped its initial proposal to 475p a share, valuing Pegasus at u31m.

Pegasus’ chief executive Jonathan Hubbard-Ford said the revised offer had not fully reflected the ‘marriage synergies’ of the tie-up, and withdrew from negotiations after his lawyers warned of a MMC challenge.

‘A referral would have put the bid on hold and there was no compulsion on Sage to come back with the same offer afterwards,’ said Hubbard-Ford. ‘Our dealers would have watched us sell out to Sage and the deal might not have gone through. What sort of message would that have sent them?’

Sage’s chairman David Goldman expressed disappointment at the end of the talks. ‘We have no plans to talk to Pegasus in the near future,’ he said.

Whitepaper

The Future of Finance is in the CFO's Hands

Business The Future of Finance is in the CFO's Hands

3m
Save a Week a Month Consolidating Accounts

Accounting Software Save a Week a Month Consolidating Accounts

4m
Mitigating Risk Through Internal Control

Legal Mitigating Risk Through Internal Control

5m
Could tax season have run more efficiently?

Corporate Tax Could tax season have run more efficiently?

5m

Related Articles

Accordance VAT launches four-day week

Management Accordance VAT launches four-day week

2w Chris Jewers
Existential angst: Accountants have nothing to fear but… everything?

Management Existential angst: Accountants have nothing to fear but… everything?

3w AJ Chambers Recruitment | Sponsored
Is inefficiency stealing your time and money?

Accounting Firms Is inefficiency stealing your time and money?

2y Emma Smith, Managing Editor
CIMA elects new president

Institutes CIMA elects new president

2y Emma Smith, Managing Editor
Transparent currency trade: How to achieve costs visibility

Governance Transparent currency trade: How to achieve costs visibility

2y Emma Smith, Managing Editor
Introduction to KPMG UK’s new leadership team

Accounting Firms Introduction to KPMG UK’s new leadership team

2y Emma Smith, Managing Editor
EY appoints head of UK Infrastructure Asset Intelligence practice

Accounting Firms EY appoints head of UK Infrastructure Asset Intelligence practice

2y Emma Smith, Managing Editor
FRP Advisory expands operation with new office, partner appointments

Accounting Firms FRP Advisory expands operation with new office, partner appointments

2y Emma Smith, Managing Editor