The board of AttentiV Systems, which earlier this month agreed to a 71 pence per share, £46.6 million cash offer from Nordic financial IT firm TietoEnator, has now put its weight behind the Microgen bid. Microgen says it has received irrevocable undertakings and non-binding letters of intent to accept the offer by shareholders representing 49.6% of AttentiV's ordinary share capital.

Microgen's Offer will be 50 pence in cash and 0.3758 new Microgen shares for each AttentiV share, implying a total of 81 pence per share, based on yesterday's closing price of 82.5 pence per Microgen share.

Peter Bertram, chairman of AttentiV, says the Migrogen offers puts a materially higher present value on AttentiV than that made by TietoEnator "and accordingly the board of AttentiV intends to recommend shareholders to accept it".

The markets reacted strongly to the news, marking down Microgen stock by six per cent to 77.5 pence and lifting AttentiV's price by 9.9% to a new high of 77.5 pence.

Microgen currently supplies business processing software and consultancy services to the UK financial market sector, with interests ranging from treasury and derivatives to Bacs payment processing. In January the company reported earnings above expectations on the back of a strong market for financial sector consultancy services and a positive contribution from AFA Systems, which was acquired in September last year.

In an AGM trading update two weeks ago, Microgen executive chairman Martyn Ratcliffe said the firm was looking at acquisition targets in the financial sector after exceeding first quarter profit targets.

Commenting on the AttentiV bid, he says: "The combination of Microgen and AttentiV will establish a significant UK supplier of software and solutions to the financial services sector. This increased scale and broader range of offerings should provide benefit to shareholders, customers and employees of the enlarged group."

Clearly stunned by the reverse, TietoEnator issued a holding statement late morning: "In view of the significant paper element in the Microgen proposal and the absence of a full cash alternative, an appropriate assessment of the Microgen offer terms requires careful analysis. A further announcement will be made by TietoEnator Financial Solutions in due course. In the meantime, AttentiV shareholders are encouraged to take no action in relation to the Microgen proposal."