Schroders has hit out at US private equity firm Silver Lake's planned takeover proposal for Software AG on the grounds that the bid "materially undervalues the company", according to reports.
According to the Financial Times, Schroders also criticised Software AG for not engaging with other takeover offers and was concerned this could raise a conflict of interest.
Schroders holds an 8% stake in the firm and is the largest shareholder outside of Germany, where Software AG is domiciled.
Rival private equity firm Bain Capital has also made a bid for Software AG via its portfolio company, US-based Rocket Software, which was higher than Silver Lake's offer.
Bain had offered up to €36 per share in its bid compared to Silver Lake's €32 per share, but the board had recommended clients choose the latter.
In a statement, Schroders said that although competing bids helped validate the long-term investment opportunity Software AG presented, "we are surprised that the takeover committee appears unwilling to engage with potentially higher offers from other interested parties".
It added that alongside potential conflict of interest issues, the conduct could question "whether appropriate fiduciary process is being followed to equally protect the interests of minority shareholders".
Shareholders will be able to voice their opinions at the annual general meeting next week.
