Micro Focus boss spooks investors with shares sale

THE boss of Micro Focus has sold half his stake in Britain’s third largest listed technology company for almost £12m for “personal financial reasons”, triggering a sharp fall in the share price.

Kevin Loosemore sold 650,000 shares in two tranches last Wednesday and Thursday at a discount to the company’s share price, netting him £11.6m.

The sale at the lower price had caused Micro Focus’s share price to fall almost 16pc last week. Shares continued to slip a further 5pc yesterday as news of the disposal emerged, amid concerns over why Mr Loosemore had chosen to sell now.

He suggested his decision was not related to the performance of the company but that it was “time for me to diversify a little”, having recently turned 60.

“Until now, all of my assets have been held in Micro Focus shares,” he said. “I remain committed to the business ... Micro Focus has a tremendous opportunity to prosper and to increase value and I will continue to work to deliver that.”

The move is likely to raise eyebrows given the difficulties Micro Focus has faced over the past year. It lost its place as the second largest listed technology company, having been leapfrogged by Aveva. It sells software to banks and retailers which use legacy IT systems.

Its business model involves acquiring companies whose margins it believes it can improve. One of the biggest drags on its growth has been the integration of Hewlett Packard’s software division, bought for £7bn in 2017.

In its interim results, Micro Focus said there was still a “complex and significant programme of work” to absorb the business, which also contains the remnants of UK software company Autonomy.

In the six months to the end of April, it spent $136.9m (£110m) on the integration. It also battled shareholder dissent over its performance, last year brushing off a vote against its plans to give bosses more time to win £270m in bonuses.

The vote had been advisory, and so Micro Focus said it would continue to implement the changes. It meant more than 30 senior bosses would be given a further year, to September 2020, to get the company’s share price up to £34.

It currently sits at £16.78. If it hits its extended targets, Mr Loosemore could earn as much as £37.4m in bonuses.