(Adds new offer details, analyst’s comments, updates shares)
Sept 1 (Reuters) - Payments processor StoneCo Ltd on Tuesday raised its bid for Brazilian software company Linx SA by nearly 4% to 6.284 billion reais ($1.17 billion), topping a proposal from software firm Totvs SA last month.
StoneCo’s also revised some provisions of its initial proposal that have drawn regulatory scrutiny, cutting its break-up fee to 453.75 million reais from 605 million reais. If Linx shareholders reject the deal, the breakup fee would fall to 112.5 million reais under the revised proposal.
Linx said compensation and non-compete terms offered by StoneCo to its executives have also been revised. All the revised terms have been discussed only with Linx’s independent board members, not with its founders, who are also executives in the company, the software company added.
Linx’s shares were up almost 4% in the morning trading, at 36.91 reais, trading at a premium to the raised Stone offer, worth 35.10 reais a share.
Despite the new higher offer, analysts’ at Credit Suisse said in a note to clients that the new proposal was “still a good deal” for StoneCo. Its shares were up 3.7%.
Still, negotiations with Totvs are not over, Linx said, adding it still lacks a more detailed proposal, including antitrust risks and consequences of the deal.
StoneCo said each Linx shareholder will get 31.56 reais in cash and 0.0126774 of a StoneCo Class A common share. Totvs’s cash-and-stock bid was 34.09 reais per share. ($1 = 5.3668 reais) (Reporting by Carolina Mandl, in Sao Paulo, and Munsif Vengattil in Bengaluru; Additional reporting by Paula Laier, Editing by Shounak Dasgupta)
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