( Reuters )- Microsoft Corp (MSFT.O) has bid 19 crowns per share for Norwegian Internet search software firm Fast Search & Transfer (FASA.OL), valuing the company at about $1.2 billion, the companies said on Tuesday.
Fast shares leapt to the bid level and then eased off slightly to 18.90 Norwegian crowns ($3.53) by 0956 GMT, up 41.6 percent.
"Fast's board of directors has unanimously recommended that its shareholders accept the offer," Fast said in a statement to the Oslo bourse.
"This offer represents a 42 percent premium to the closing price on January 4 (the last trading day prior to this announcement) and values the fully diluted equity of Fast at 6.6 billion Norwegian crowns or approximately $1.2 billion," Fast Search & Transfer said.
Shareholders with 37 percent of Fast's stock, including its two biggest institutional investors -- Norway's Orkla (ORK.OL) and Hermes Focus Asset Management Europe -- have agreed to accept the cash offer, the companies said.
The deal is subject to regulatory approval and acceptance from shareholders with more than 90 percent of Fast's shares, Fast Search & Transfer said.
"The transaction is expected to be completed in the second quarter of the calendar year 2008," Microsoft Corp said in a statement.
Fast Search & Transfer provides Internet search software to companies.
" Enterprise search is becoming an indispensable tool to businesses of all sizes, helping people to find, use and share critical business information quickly," Jeff Raikes , head of the Microsoft Business division, said in Microsoft's statement.
"The combination of Microsoft and Fast gives customers a new choice: a single vendor with solutions that span the full range of customer needs," he said.
The deal would enable Fast to spread its search technologies more broadly around the world, Fast Chief Executive John Lervik said in the statement.
Goldman Sachs is acting as financial adviser to Microsoft, and Merrill Lynch is advising Fast.
Microsoft and Fast will hold a telephone conference to discuss the offer at 1815 GMT.