Alchemy rescue bid boosts Cedar

SHARES in struggling software group Cedar rose 1 1/2p to 4 3/4p after the firm agreed to a rescue bid offer of 5p per share from private equity group Alchemy. The Cobham, Surrey-based software group, worth almost £1bn 18 months ago and now on the brink of collapse, said its independent directors were recommending the bid which values the group at just £3.8m.

The deal also sees a complete restructuring of Cedar's £38.3m debt with company banker HBOS. The bank, and Alchemy bid vehicle Redac, will immediately provide £5m each in emergency liquidity to help keep Cedar afloat, repayable if the bid fails to win the required 50% of acceptances.

HBOS is thought to have taken an £18m hit on Cedar's total debt to facilitate the deal. Cedar chief executive Michael Harrison will own 0.5% of Redac.

Alchemy has made no commitment to safeguard Cedar's 1,000 workers but said jobs were less at risk under its rescue plan than under any alternatives. Results of shareholder returns should be known on 28 January.