Of course, it will require shareholder approval but, with Keysight receiving irrevocable undertakings from over 15% of Anite’s shareholders, it seems likely that it will gain sufficient support to progress. And, with the deal valuing Anite at a 22% premium to its closing share price yesterday of £1.03, the offer appears to be generous – especially since it is an all-cash offer.

A Good Deal

Clearly, Keysight and Anite’s management teams believe that the deal is a good one for Anite. As well as the usual synergies and shared costs that are a benefit of most mergers and acquisitions, the deal will see a bigger company better able to take on rivals and support customers in an industry where size and scale are becoming increasingly important. Furthermore, Keysight believes that Anite’s software expertise will complement its own hardware expertise and will allow the joint business to better serve the increasing customer consolidation that has become a feature of the markets in which the two companies operate.

A Bad Deal

While the offer price does represent a substantial premium to Anite’s closing share price from yesterday and the combined entity looks set for a very bright future, the deal may not be such a good one for Anite’s shareholders. Certainly, they will be pleased with today’s share price gains, but Anite’s share price could have moved considerably higher over the medium term.

That’s because it is expected to post impressive earnings growth numbers over the next two years, with growth of 19% forecast for the current year, and 11% pencilled in for next year. Despite this, Anite’s current share price of £1.27 (which is slightly above the offer price of £1.26) equates to a price to earnings (P/E) ratio of 19.1 which, when combined with its growth rate, equates to a price to earnings growth (PEG) ratio of around 1.2.

This represents growth at a reasonable price and so it could be argued that Anite’s share price had further upside above and beyond the £1.26 offer from Keysight. In fact, a level similar to that reached in 2012, when Anite’s share price hit £1.60, could have been achievable in the coming years.

Looking Ahead

Whether or not it is a good or bad deal for Anite’s investors, it appears likely that the proposed acquisition will become a reality. And, while Anite’s share price may have moved higher in the long run, the company’s investors will at least have the cash available to invest in other, similarly exciting, opportunities.

The post Anite plc Surges 24% On £388m Cash Offer appeared first on The Motley Fool UK.

This followed an upbeat first half of the year, with a seasonal lull in activity that normally takes place in the third quarter of the year being swept aside this time around. As a result, the company has maintained its full-year guidance and, as a result, investor sentiment in the company has helped to push its share price considerably higher.

And, as a result of the strong third quarter, Anite has entered the seasonally important final quarter of the year with a larger pipeline of sales opportunities than at the same time as last year, which bodes well for the near-term outlook for the company, too.

Valuation

Despite today’s share price gains, Anite still offers good value for money. For example, it currently trades on a price to earnings (P/E) ratio of 15.7 which, when you take into account its forecast growth rate in earnings over the next two years, indicates that its shares are underpriced right now.

That’s because Anite is expected to increase its bottom line by 16% next year, followed by a further rise of 11% in the year after. When combined with its P/E ratio, this equates to a price to earnings growth (PEG) ratio of just 1.1, which indicates that growth is on offer at a very reasonable price.

Sector Peers

Clearly, Anite is a relatively small company and, looking at the software and computer services sector, two of the largest companies by market capitalisation are Sage (LSE: SGE) and Micro Focus (LSE: MCRO). When comparing Anite to its two larger peers, it seems to more than hold its own.

For example, although Sage is expected to increase its bottom line by 11% next year, followed by 8% the year after, its rather rich P/E ratio of 21 seems to somewhat price this in, with it having a PEG ratio of 1.8. And, even though Micro Focus has a lower valuation that Sage or Anite, with it having a P/E ratio of 15.3, its slightly lower growth prospects equate to a PEG ratio of 1.3, which is less appealing than that of Anite.

Of course, both Sage and Micro Focus offer increased scale and diversity than Anite, which goes a long way to explaining their higher valuations. However, Anite still appears to offer great prospects at a highly appealing price and, as such, could make for an excellent partner for sector peers Micro Focus and Sage in your portfolio.

The post Is Anite plc The Perfect Partner For The Sage Group plc & Micro Focus International plc In Your Portfolio? appeared first on The Motley Fool UK.

But in these days of volatile economic sentiment, there are shares reaching their own individual low points — and some might prove to be bargains. Here are three from the various indices that are in that sad state:

Royal Dutch Shell

Royal Dutch Shell (LSE: RDSB) (NYSE: RDS-B.US) hasn’t quite slumped to a 52-week low, but at a closing price of 2,108p last night it was just a shade above of the 2,093p bottom it scraped in November last year — and since then we’ve seen renewed signs of growth from China and optimistic economic figures from the UK and US.

What that says to me is that Shell shares are surely cheap now, on a forward P/E of just over 8 and offering a predicted dividend yield of 5.5%. There is an 8% fall in earnings per share (EPS) forecast — but come on, the demand for the black stuff can surely only rise over the longer term, can’t it?

Ashmore Group

Ashmore (LSE: ASHM) shares are also getting very close to their 12-months lows again, closing yesterday on 326.8p and not far off the levels of a year ago. The firm, which manages investments in emerging markets, seems to have suffered as the world’s developed economies start to strengthen again, and the shares are currently on a forward P/E of just under 13 based on expectations for the year ended 2013. And there’s a 4.4% dividend yield looking likely.

Emerging markets can provide nice returns, and shares in a company that manages such investments seems like a good idea to me. With investor attention turned elsewhere, and Ashmore expected to see a 10% rise in EPS next year, could now be a good time to get in? We should have those results on 10 September.

Anite

Anite (LSE: AIE) shares have entered a bit of a slump, falling to a new 52-week low today of 109p — they’re back up a penny from that at the time of writing. The firm, which develops testing software for the mobile phones business, released a first-quarter update last week telling us of “a slow start to the current year“. The business is apparently seasonal, and the firm says it does not expect the slow start to the year to adversely impact full-year performance.

There’s a 4% rise in EPS forecast for the year to April 2014, putting the shares on a P/E of 12. You might think the recent fall is overdone and Anite is now a strong buy — if you do, nine out of ten analysts would agree with you.

Finally, what’s the best way to deal with share price falls? One way is to focus on dividends, which can be spent or reinvested according to your needs — whether investing for income or growth, good old cash is always welcome.

And that’s why I recommend the BRAND-NEW Fool report, “The Motley Fool’s Top Income Share For 2013“, in which our top analysts identify a share that they believe will provide handsome dividend income for years to come.

It will only be available for a limited period, so click here to get your copy today.

> Alan Oscroft does not own any shares mentioned in this article.

The post 3 FTSE Shares Crashing To New Lows: Royal Dutch Shell Plc, Ashmore Group plc And Anite plc appeared first on The Motley Fool UK.

There are very few shares doing much today either, but here are three from the FTSE indices that look unlikely to beat the market:

WS Atkins

WS Atkins (LSE: ATK) shares dipped 10p (1%) to 1,161p after the firm announced the disposal of Peter Brown — thankfully, that’s a US subsidiary company and not a board member. The construction consultancy is to be sold to Moss & Associates of Florida, for a cash sum of £2.6m, and Atkins should see a loss on disposal of around £3m.

Chief executive Prof Dr Uwe Krueger told us that “The disposal of our Peter Brown business is another step in the implementation of our strategy, which includes the optimisation of our portfolio of businesses“.

Anite

Anite (LSE: AIE), which develops testing software for the mobile phones business, saw its share price slump by 13p (10.4%) to 113p this morning, after a first-quarter update told us that trading “has been relatively quiet“, with its handset testing services having “a slow start to the current year” and bringing in lower revenue and profit than the comparative period a year ago.

Net debt increased sharply too, up from £0.9m at 30 April to £4m at 31 July. The firm did stress, however, that its first quarter is seasonally slow, and that the rise in debt was “in line with normal seasonal patterns“.

Avon Rubber

An interim update from Avon Rubber (LSE: AVON) sent the firm’s shares down 11.7p (2.4%) to 477p, despite an assurance that full-year results are expected to be in line with market expectations. Net debt was up a little, from £8.7m in September 2012 to £11.4m as of 30 June 2013 — but a couple of acquisitions added £3m of that, and the firm says its balance sheet is robust.

Earnings per share are expected to be up just 2% for the year to September and there’s a 9% rise forecast for the following year, putting the shares on a P/E of 14 falling to around 13.5 for the two years respectively. The dividend yield is low, at around 1%.

Finally, you can compensate for the day-to-day ups and downs of share prices by looking for reliable dividends. So how would you like a company that’s offering a 5% yield and which could be set for some nice share-price appreciation, too?

All you need to do is get a copy of our BRAND-NEW report, “The Motley Fool’s Top Income Share For 2013” — it’s completely free of charge, but it will only be available for a limited period. Click here to enjoy your copy today.

> Alan does not own any shares mentioned in this article.

The post Why WS Atkins PLC, Anite plc And Avon Rubber plc Should Lag The FTSE 100 Today appeared first on The Motley Fool UK.