Shares in 1Spatial (AIM:SPA) surged to 66p this morning after the geospatial software group said it has agreed terms in principle with VertiGIS on a possible 73p-a-share cash offer.
At that level, the company would be valued at about £87.1 million.
VertiGIS, owned by US investment firm Battery Ventures, has already completed most of its due diligence and says it needs only limited checks before deciding whether to make a formal offer.
The board of 1Spatial has indicated it would unanimously recommend the bid if it is formally launched.
The price implies a premium of around 57% to Wednesday’s close and just over 50% against three- and six-month average levels.
That uplift has helped VertiGIS secure early backing: major shareholders representing 33.8% of the register, including Threadneedle and Canaccord, have signalled support.
If it proceeds, the deal is expected to be structured as a court-approved scheme of arrangement, although VertiGIS could opt for a conventional takeover.
The 1Spatial board said it continues to believe in the group’s long-term prospects but considers the proposal a fair cash outcome in a tough market for smaller UK tech companies. It added that private ownership could accelerate investment in products and sales.