Micro Focus spikes as activist investor takes stake - report

Shares in software group Micro Focus International spiked on Thursday afternoon on reports that activist investor Elliott Investors had taken a stake.

The US fund was said to be "pushing for changes" at the UK software firm, according to a Bloomberg report.

Shares in Micro Focus, which recently nosedived after the company downgraded its profits guidance less than six months after completing the reverse takeover of HP Enterprise's software arm, spiked more than 12% above 1,300p before easing to 1,246p, where they were up around 6%.

The profit warning last month saw chief executive Chris Hsu jump ship as the FTSE 100 group admitted that the rate of revenue decline in the business had been "greater than anticipated", cutting guidance for turnover to fall 6-9%, down from the 2-4% decline indicated in January.

Cost cutting has been "ahead of schedule" since the acquisition and so earnings before interest, tax, depreciation and amortisation will not fall quite as much, with an adjusted EBITDA margin percentage of roughly 37%.

An Elliott spokesperson said the company was declining comment on the matter, while a representative of Micro Focus said the company would release the appropriate regulatory form if and when any share purchase of sufficient size was made.