Micro Focus Intl. PLC [MFGP] - Last Close: $3.13
News of buyout deal is skyrocketing shares of Micro Focus International.
The enterprise software company is soaring after a late Thursday announcement revealed it had agreed to be acquired by Open Text in a $6 billion deal.
Under the terms of the deal, Open Text will pay 532 pence per share to acquire Micro Focus. That's nearly double MFGP's Thursday closing price of 267.8 pence.
Open Text (OTEX.NaE) said the friendly acquisition will bring US$400 million in costs savings and will be funded by US$4.6 billion in debt and US$1.3 billion in cash and is subject to shareholder, court and regulatory approvals.
The deal is expected to close in early 2023, and it will help Open Text achieve its goal of becoming "one of the world's largest software and cloud businesses".
Shares of MFGP have skyrocketed 94.3% on news of the deal.
My Take: Wow, what a move. Unfortunately, there's not a lot of upside left in this trade, and there could be significant downside if the deal falls through. If you're not already in this stock, safe to say you missed the boat.
American Virtual Cloud Technologies [AVCT] - Last Close: $0.1360
Shares of American Virtual Cloud Tech are rallying after a major announcement.
Following Thursday's closing bell, the pure-play cloud firm said it had initiated a strategic review process to explore the sale of the entire business or selected assets.
As part of the effort, the company has named a new CEO. Chief Transformation Officer Kevin Keough will take the wheel, and CFO Tom King will transfer to interim chief of staff.
Larry Mock will again assume the role of board chair, replacing Michael Tessler, who will leave the company. Former CEO Darrell Mays will continue to serve as executive vice chairman, the company said.
News of the board shakeup and deal-making agenda is lifting shares of AVCT to big premarket gains. The stock is up 41.8% and it's this morning's most active premarket stock.
My Take: If AVCT wants to sell itself, there could be a big catalyst in its future. Then again, just because AVCT wants to sell itself doesn't mean anyone wants to buy it. This could be a promising speculative trade, but make sure you're aware of all the risks before you place a big bet.
