Bravura Solutions shares fall after another earnings downgrade sparks concerns over Ironbridge Capital's takeover.
Bravura Solutions shares tumbled yesterday after it forecast lower earnings which reignited concerns that Ironbridge Capital may discard its takeover proposal for the company.
Sydney-based Bravura announced that its earnings are expected to be around $19 to $20 million for the financial year ending 30 June, 2008.
The company's stock fell 31 cents or 22 per cent to $1.08 in Australian Securities Exchange (ASX) trading yesterday and nearly erased the previous week's gains.
Bravura last downgraded its earnings June 16, forecasting earnings of between $22.5 million to $26.5 million.
That was already below the $26 million to $29 million the company's directors Iain Dunstan and Simon Woodfull had expected previously.
The latest downgrade followed a statement Bravura issued to the ASX that the company had problems closing some of its contracts.
Bravura hoped to sign some deals before the end of the financial year so that they could be included as revenue in its upcoming profit report.
Delays of those contracts would "cause reductions" in 2008 earnings but would be included in the "succeeding reporting period" the Bravura statement said.
Bravura is in talks with Ironbridge about the downgrade and mentioned the Sydney-based private equity firm "remains positive" about the deal, although discussions would take weeks.
Ironbridge had renewed a $272 million all-cash offer which valued Bravura at $1.73 per share last Friday.
"The $1.73 share takeover from Ironbridge is under threat, the whole deal is under threat," Morningstar analyst James Cooper said.
It was possible that Ironbridge would simply make a lower offer, Cooper said.
Ironbridge's offer stated that Bravura's earnings must come in at least $23.5 million and the company must not issue shares or use its cash to make a takeover.
Bravura announced on June 30 that it may make an acquisition.
In Part 2 of our exclusive series, we ask leading names to nominate their best investments, the most effective industry group and the importance of platforms.
Catholics revamp fixed interest »
Industry superannuation fund the Catholic Superannuation and Retirement Fund (CSRF) has revamped its fixed income portfolio.
Mercer backs alternatives »
Mercer has awarded $34.15 million in mandates to Tactical Global Management (TGM) and Lazard Asset Management to invest in alternative assets.
