Birch Hill Equity to take Softchoice private in friendly deal; stock soars

TORONTO – Softchoice Corp. stock (TSX:SO) soared to its highest level in years Tuesday in the first trading since it announced a friendly takeover offer from a Canadian private-equity firm that values the company at about $393 million.

The information technology company announced late Monday that Birch Hill Equity Partners has agreed to buy all Softchoice outstanding shares for $20 each — well above the market price.

The shares traded as high as $20.19 on Tuesday and were at $20.01 at midmorning, a gain of $3.18 from Monday’s close.

Softchoice stock hasn’t been above $20 since early 2008.

The company’s board is unanimously supporting the offer and each side has agreed to pay a $12-million break fee to the other if the deal is terminated under certain circumstances.

Softchoice has also agreed that it will not pay any dividends prior to closing, including one that would have been made in June.

The deal is subject to approvals by at least two-thirds of shareholder votes cast at a meeting to be held in June and the Ontario Superior Court of Justice.