The offer, which is being made through Deloitte & Touche Corporate Finance, is for 100p in cash for each Rolfe & Nolan share, a substantial premium over the 85 pence per share bid by US vendor onExchange.

Rolfe & Nolan's shares, trading at a relatively high 78.5 pence on the back of the onExchange bid, rose a further 24% in early trading to stand at 97.5 pence.

Maia Holdings says it already has agreements for 33.6% of Rolfe & Nolan’s share capital. If the offer is accepted, the management team - which includes Rolfe & Nolan chief executive Robert Freeman, non-exec chairman Tim Hearley and other other current directors and employees - will hold 21.6% of the shares, Stephen Lacey, a former finance director at Eyretel, will hold 1.5%, and the remaining 76.9% will be in the hands of HgCapital.

Leo Dee of HgCapital says: "Rolfe & Nolan has a long track record with a well-established customer base and an exciting pipeline of new products. It will make an excellent addition to HgCapital's technology portfolio, which is focused on transaction processing companies for financial services, communications, healthcare and enterprise customers."

The deal represents a bargain-basement price for HgCapital. At the height of the tech stock bubble in February 2000 Rolfe & Nolan had a market cap of £102 million.

In agreeing the offer, the independent directors of Rolfe & Nolan say they took into account the challenging trading conditions for companies selling software to the financial services market and the risks associated with delivery of the firm's business-critical next generation software project Merlin.

Rolfe & Nolan reported a profit before tax of £77,000 on turnover of £10.7 million in the half year to August 2002, substantially down on H1 2001. The vendor recently commenced a redundancy programme that is expected to yield cost savings of approximately £1.3 million per annum.