Blue Prism hits back after shareholder revolt over acquisition

Vista's offer for UK RPA firm undervalues it, says investor Coast, urging other shareholders to vote against the deal

Vista Equity Partners' planned acquisition of UK RPA firm Blue Prism has been called into question after objections by shareholder Coast Capital.

At the end of September, Blue Prism agreed to be acquired by Vista for £1.1 billion ($1.5 billion) in cash, having also shortlisted a proposal from investment group TPG Capital, and recommended that its shareholders accept Vista's offer.

Vista plans to merge Blue Prism with enterprise data company Tibco, which it acquired in 2014.

However, Coast, which holds around 3 per cent of Blue Prism's stock, came out against the purchase, saying the offered £11.25-per-share offer is too low and adding that the bid undervalues Blue Prism. It encouraged other investors to vote against the deal.

In a statement to the London Stock Exchange, on which it is one of the largest technology companies listed, Blue Prism today defended the Vista deal, rejecting Coast's accusations that the deal was flawed and that there were conflicts of interest and insisting it was the result of months of consultations with 15 strategic parties and 12 financial sponsors. It added that Vista's offer, with the prospect of integration with its existing portfolio, was preferable to TPG's alternative bid.

"After discussions and negotiations with both parties, Vista submitted their final proposal which represented a value that was both the highest in the process and superior to the company's standalone alternatives, which the board concluded was worthy of recommendation to Blue Prism shareholders," the Blue Prism statement said.

"The board's decision to recommend the Vista offer reflects its belief that the Vista offer provides greater value and less risk than Blue Prism's current standalone prospects and potential standalone alternatives."

Blue Prism confirmed it has received an ‘operational improvement plan' from Coast, but said it lacked sufficient detail to be properly assessed by its board.

"The Blue Prism board has determined that the acquisition is in the best interests of Blue Prism shareholders, immediately delivering certain value without the execution risks associated with the necessary strategic investments envisaged," the firm said.

Founded in 2001, Blue Prism, which boasts more than 2,000 enterprise customers, is best known as one of the originators of robotic process automation (RPA) along with rivals UiPath and Automation Anywhere.

However, its market valuation, as signified by the Vista offer, is significantly below that of its rivals. UiPath is valued at $28 billion while Automation Anywhere was valued at of $6.8 billion in 2019.

This year, prior to the Vista bid, Blue Prism saw the value of its shares slide because of worries that it has been falling behind its competitors.