MFGP - Why Is Micro Focus (MFGP) Stock Up 94% Today?
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Micro Focus (NYSE:MFGP) stock is rocketing higher on Friday as investors react to news of an acquisition deal with Open Text (NASDAQ:OTEX).
That deal will see Open Text acquiring MFGP stock at a price of $6.30 per share. That represents a 101% premium over the stock’s closing price on Thursday. It also values the deal at $6 billion when including Micro Focus’ debt.
Micro Focus is an enterprise software provider. The company focuses on helping customers manage the IT elements of their businesses. OpenText is a cloud information company that provides customers with information management solutions. The companies are expecting $400 million in synergies from the combination.
Mark J. Barrenechea, CEO and CTO of Open Text, said the following about the deal.
“Upon completion of the acquisition, OpenText will be one of the world’s largest software and cloud businesses with a tremendous marquee customer base, global scale and comprehensive go-to-market. Customers of OpenText and Micro Focus will benefit from a partner that can even more effectively help them accelerate their digital transformation efforts by unlocking the full value of their information assets and core systems.”
Today’s news brings with it heavy trading of MFGP stock. As of this writing, more than 5 million shares have changed hands. That’s a massive jump from its daily average trading volume of about 415,000 shares.
MFGP stock is up 93.8% as of Friday afternoon.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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