A new letter of intent from Tikvah Management lifts support for the all-cash takeover to about 49.2% of the construction software maker's stock.
Accel-KKR's recommended takeover of Eleco has moved closer to the finish line, with shareholders representing about 49.2% of the construction software company's issued stock now committed to the deal.
Support now covers 41,542,531 shares through a combination of irrevocable undertakings and non-binding letters of intent in favor of the all-cash offer from Avocet Bidco, the Accel-KKR vehicle. The latest addition came from Tikvah Management, which signed a letter of intent covering 3.38 million shares.
Doing the math
Those figures imply Eleco has roughly 84.4 million shares in issue. Tikvah's stake alone accounts for about 4% of the company, a meaningful addition that moved total support from roughly 45% to just under half.
That matters because of how UK schemes of arrangement are approved. The deal needs the backing of 75% of the votes cast by value at the shareholder meeting, along with a majority by number of those voting. Because turnout at such meetings is rarely complete, a committed bloc near 50% of all issued shares typically represents a far larger share of the votes actually cast. At a 65% turnout, for example, the pledged shares alone would account for about three-quarters of the vote.
A distinction worth noting
Not all of the support is equally firm. Irrevocable undertakings bind the holder to vote in favor, while letters of intent express a willingness to do so without the same legal commitment. The shift toward letters of intent in the latest update adds weight to the tally, but a rival bid could still pull some of those holders away.
The competitive landscape
No competing offer has emerged. Eleco, which makes software for the construction and architecture industries, fits the profile of UK-listed specialist software firms that have attracted private equity attention this year.
What to watch
With support approaching the level that makes approval highly likely, the remaining risk is a late counterbid. Absent one, the next milestone is the shareholder meeting itself.