GLOBALSOFT.COM shook the bourse yesterday with its surprise takeover of software developer and provider Cycom in a cash deal worth £16.5 million.
Globalsoft signed a deal with owners PriceWaterhouseCoopers yesterday morning. Earlier this month the company also took over the operations of the Word Processing Centre, Infostar and Copystar in Nicosia.
Cycom are the exclusive Cyprus agents of Oracle Corporation and are also distributors for Seagate Software, Sculptor, Hartley Accountant and Lotus Notes. They have 2,400 corporate clients.
Cycom’s turnover this year is projected at four million pounds, with a pre-tax profit of one million, Globalsoft said.
Cycom, established in the early eighties, had plans to list independently on the bourse.
"They certainly scooped us on this one," a stockbroker said. "We had no idea."
Shares in Globalsoft closed 18 cents higher to six pounds and were the second most active stock in terms of volume with 1.25 million shares changing hands.
The stock opened at £6.40 and lurched to an intraday high of £6.50 before speculators moved in, dragging the share lower.
Speculators were out in force again on the market yesterday as the broad sector fell one per cent. There were notable losses in the tourism sector which fell 1.7 per cent after Monday’s three per cent increase.
Traded values were significantly lower at £29 million compared to £37.3m recorded on Monday. There were also fewer deals — 6,415, which was among the lowest recorded this month.
"The market has no direction so it is at the mercy of speculators at the moment," said one dealer.
But dealers also pointed to investors worried at signs that the Central Bank will start getting tough with commercial banks for exceeding credit expansion guidelines, the second time in less than a year.
"If liquidity is curbed that will have an indirect effect on us," the dealer said.
The Central Bank is keen to keep a lid on credit expansion for fear it will further fuel inflation — which was running at 4.7 per cent year-on-year in April as a result of high crude oil prices on world markets.
There are reports that credit expansion for the first quarter of 2000 surged 30 per cent, which is well beyond the 10 per cent guideline set by the Central Bank.
Yesterday Central Bank Governor Afxentis Afxentiou said that certain measures would be imposed on banks, but declined to go into specifics. "We have prepared a plan to reduce credit expansion, but it is not the time right now to make announcements," he said on the sidelines of a news conference given by IMF mission chief Demetris Demekas yesterday morning.
Liberty Life said yesterday it will issue nil-paid rights and warrants to shareholders to support future expansion plans into general insurance and mutual funds.
The firm said it would issue shareholders with one nil-paid right share for every eight shares held as on September 29, 2000, with an exercise price of £1.20 each. Share warrants would be issued at a ratio of one for every eight ordinary shares held.
They would be issued at the same time as the nil-paid rights and mature in March 2002 at an exercise price of £1.30 each.
Cyprus Airways, in the meantime, said it would give a five per cent dividend to shareholders on its 1999 net profits. The percentage corresponds to £119,420.
The airline posted a pre-tax gain of £8.8 million in 1999, down from a record £10 million in 1998 as a result of higher fuel costs.
The constitution of the national carrier obliges the firm to distribute at least five per cent of available profits to shareholders in the form of dividends each year.
