Darktrace shares slump after takeover talks collapse

theguardian.com:

Shares in Darktrace, the British artificial intelligence and cybersecurity company, slumped by 30% after US private-equity firm Thoma Bravo walked away from a potential takeover of the business, whose founder, Mike Lynch, is fighting extradition to the US on fraud charges.

Despite full-year results that showed an increase in sales, helping the Cambridge-based company turn last year’s heavy losses into profit, investors sold off Darktrace stock in droves on Thursday, as the chances of a money-spinning takeover evaporated.

Under City takeover rules, Thoma Bravo cannot return with an offer within six months, except for if certain conditions are met, such as a rival bidder entering the fray, or an agreement being reached directly with the Darktrace board.

As Darktrace’s stock tumbled by nearly a third to 353.6p in morning trading on Thursday, ShadowFall, a hedge fund that has taken big bets on its shares falling, said the end of Thoma Bravo’s interest vindicated its belief that the company was overvalued.

But in a statement accompanying Darktrace’s annual results, its second as a public company after last year’s stock market float, the chief executive shrugged off the dissolution of talks that could have triggered £200m in payouts for senior managers.

“Being listed on the London Stock Exchange is exactly where we want to be right now,” said Poppy Gustafsson, a former protege of Lynch, who still owns more than 12% of the company, together with his wife.

Lynch’s legal travails have cast a shadow over Darktrace, despite his day-to-day involvement with the business ending earlier this year.

The billionaire, who has been described as Britain’s answer to the Microsoft founder Bill Gates, is expected to learn within weeks whether he has