Acceptance Level Update

Frankel UK Bidco Limited, the vehicle backed by Long Path Partners funds, has updated shareholders on its recommended cash takeover offer for Idox plc (AIM:IDOX), revealing valid acceptances for 169,208,501 shares as of 4.30pm London time on April 16, 2026—equivalent to 36.65% of Idox's issued share capital of 461,682,046 shares. Including irrevocable undertakings from Idox directors and select shareholders covering 92,687,644 shares (20.08%), as well as acceptances from parties acting in concert, Frankel can count 197,956,637 shares or 42.88% towards the 50% acceptance condition required under the UK Takeover Code. Valued at 71.5 pence per share, the offer implies a total equity value aligning closely with Idox's current market capitalisation of GBP 329.6 million, and remains open until May 14, 2026—Day 60 of the timetable. While this represents tangible progress in a drawn-out process, the level remains below the pivotal 50% threshold with less than a month remaining, prompting scrutiny of whether momentum will suffice or if holdouts among the free float will force concessions or an extension.

The announcement traces back to the initial Rule 2.7 declaration on October 28, 2025, when boards of both Frankel and Idox endorsed an all-cash acquisition via a court-sanctioned scheme of arrangement. The scheme document followed on November 20, 2025, but court and general meetings were adjourned on December 15, 2025, to allow more shareholder dialogue—a signal of early resistance or deliberation that deviated from the typical swift execution of recommended deals. By January 5, 2026, with Idox and Takeover Panel consent, Frankel pivoted to a Chapter 3 takeover offer, with the offer document and Form of Acceptance posted January 15, 2026. This shift from scheme to offer, while not uncommon in contested or slow-moving bids, underscores a retreat from the higher 75% approval bar of a scheme to the more achievable 50% plus one for a takeover, reflecting pragmatic adaptation but also potential weakness in initial shareholder buy-in. Against Idox's own prior disclosures, no material operational changes have intervened; the bid persists amid steady trading, with the acceptance update confirming incremental but not accelerated uptake since the offer's launch.

Idox's financial position, as gleaned from its most recent half-year report published on RNS for the six months ended July 31, 2025, showed revenue of GBP 72.2 million, up 2% year-on-year, with adjusted EBITDA of GBP 12.4 million and net debt reduced to GBP 22.1 million—indicating operational stability in its core public sector software and engineering information solutions segments. Cash stood at GBP 15.8 million, supporting a quarterly burn moderated by positive free cash flow generation of GBP 2.1 million in the period. With no fresh capital raises or distress signals in the interim, Idox enters the bid endgame with a funding runway exceeding 12 months absent acceleration in M&A or growth initiatives, rendering the takeover's funding sufficiency a non-issue for Frankel, whose Long Path backers have committed via irrevocable undertakings and concert party holdings, including 56,876,997 shares (12.32%) by the SCF Master Fund. Dilution risk is absent in this all-cash structure, but the 71.5 pence offer— a 41% premium to the pre-announcement close—sits below some analyst fair value estimates floated pre-bid, potentially pressuring Frankel if acceptances stall.

Valuation-wise, the offer embeds Idox at an enterprise value approximating GBP 350 million (post-net debt), or roughly 5.5x half-year EBITDA on a run-rate basis—a multiple that holds up modestly against AIM-listed software peers in the public sector and geospatial niches. Cerillion plc (AIM:CER), a cloud-based billing and customer care software provider with a market cap bracketing GBP 250 million, trades at around 6.2x forward EBITDA, reflecting stronger recurring revenue growth of 25% in its latest results but from a smaller base; its acceptance of similar bid interest in the past underscores sector M&A appeal. Intelligent Ultrasound Group plc (AIM:IUG), at a comparable GBP 50-80 million cap tier but focused on medical imaging software, commands 4.8x sales on account of clinical trial catalysts, offering a discount to Idox yet highlighting execution premiums for specialised verticals. Eckoh plc (AIM:ECK), another payments and security software peer around GBP 100 million, values at 7.1x EBITDA amid organic expansion, suggesting Idox's offer multiple is mid-pack—neither a bargain for Frankel nor a rip-off for shareholders, but trailing peers with higher growth trajectories by 10-20% on comparable metrics. This positions Idox as fairly priced in a takeover context, where peers' higher multiples reflect standalone upside absent bid certainty.

Executionally, the bid's track record reveals a deliberate pace rather than red flags: the scheme-to-offer pivot addressed shareholder feedback without derailing recommendations from Idox's board, and concert party acceptances (6.09%) plus director undertakings demonstrate alignment. A genuine positive emerges in the rollover shares mechanism—28,748,136 from the SCF Master Fund via transfer agreement—locking in key support and reducing free float volatility. Yet, with 42.88% countable versus 50% needed, the update exposes a reliance on the remaining 57% float, where institutional holdouts could demand sweeteners; prior adjournments signal this risk materialised once already. No patterns of repeated extensions appear, but the Day 32 disclosure—mandatory under Takeover Code—serves more as compliance than catalyst, with Frankel's awareness of public share counts ensuring transparency. Peers like Cerillion have navigated bids more fluidly, closing at premiums without structural shifts, underscoring Idox's process as competent but unexceptional.

In peer landscape terms, Idox's bid dynamics mirror a sector trend of consolidation among AIM tech firms facing scale challenges: Cerillion rebuffed lower bids historically before commanding premiums, while Intelligent Ultrasound's lower multiple reflects development-stage risks absent in Idox's mature revenue base of GBP 150 million annually. Eckoh's outperformance on multiples stems from niche dominance, contrasting Idox's broader but commoditised public sector exposure. This announcement neither elevates nor erodes Idox's relative standing—peers trade at similar or superior valuations without active bids, implying the 71.5 pence floor caps standalone re-rating potential.

No specific next catalyst beyond the May 14 deadline was detailed, though a Day 39 or Day 46 update could precede if momentum builds; failure to hit 50% might trigger Panel consent for extension or revised terms. Overall, this acceptance level update registers as moderate: incremental progress in a recommended bid with structural tailwinds like undertakings, yet the sub-50% tally and historical pivots temper enthusiasm, confirming headline sentiment as directionally positive but not transformative. Investors should weigh the certain 71.5 pence exit against peers' growth premiums, viewing the process as a value-realising floor rather than a strategic shift.

Key insights

• ●Acceptance at 42.88% countable vs 50% needed, building on Oct 2025 scheme pivot after Dec adjournment.
• ●Offer multiple mid-tier to AIM software peers, capping re-rating absent bid success.
• ●Director undertakings (20.08%) lock support, reducing float risk vs historical bid delays.

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