CAPITA PLC (Reuters) - Outsourcing company Xchanging Plc (>> Xchanging Plc) said it had received two separate bids from larger rival Capita Plc (>> Capita PLC) and private equity firm Apollo Global Management LLC.
Apollo had made an offer of 170 pence per share, said Xchanging, valuing the British outsourcing company at about 421 million pounds ($640.5 million) based on the company's outstanding shares on Sept. 24.
Capita had made a fourth offer of 160 pence a share on Sept. 24.
Shares in Xchanging, which runs back-office activities such as invoice processing and insurance claims settlement, surged about 55 percent to a high of 171.25 pence, indicating that some shareholders may be expecting a higher bid.
The news of takeover interest in Xchanging comes just over a month after the company said its procurement unit performed poorly in the first half and that its chief executive would leave.
Xchanging had granted both firms due diligence access, the company said in a statement dated Oct. 4.
Capita, which runs services including the Ministry of Defence pension scheme, said separately that Xchanging's board had confirmed it would be willing to recommend Capita's final offer.
Capita's final offer is 20 pence higher than its first one and represents a premium of about 45 percent to Xchanging's closing price on Friday.
Up to Friday's close, Xchanging's shares had slumped nearly 29 percent this year, a wider fall than the marginal drop in the broader FTSE All Share Support Services Index <.FTASX2790>.
($1 = 0.6573 pounds)
(Reporting by Esha Vaish in Bengaluru; Editing by Anand Basu)
