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Morse and 2e2 expected to tie the knot

Microscope contributor

Morse has confirmed it is locked in negotiations with a suitor understood to be 2e2 that could lead to an offer of 51 pence per share being tabled.

Last night MicroScope called senior management at Morse and 2e2 to discuss continued talk in the industry that both firms have resurrected a deal, which fell apart earlier this year.

In response, Morse put out a statement this morning, noting "recent media speculation and confirms that it is in advanced talks, which may or may not lead to an offer being made for the Company at 51 pence per share."

This offer values Morse at roughly £66m and has sent the integrator's share price up by 17.5% to 48.50 pence.

According to sources, 2e2 investors were yesterday informed that their shareholding will be diluted as the board needs to raise capital, which is expected to be used to fund its first acquisition in some time.

It is believed that 2e2 wants to raise around £85m to £90m to pay for Morse and keep aside £10m to £15m to be used a working capital to run the firm.

The joining of Morse and 2e2 would create a channel powerhouse with revenues in the region of £400m, covering all the major vendor lines and with a rich annuity business including established cloud services.

The two integrators were understood to have been talking earlier in the year, with 2e2 negotiating a reverse takeover that would have seen it assume Morse's listing on AIM.

2e2 refused to comment.

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