BERLIN, April 27 Reuters Stock exchange operator Deutsche Boerse on Thursday announced a 3.9 billion euro 4.31 billion takeover offer for Danish investment management software company SimCorp SA, as it looks to diversify its business.

Shares in Deutsche Boerse dropped more than 6 after the German company announced the allcash deal at 735 Danish crowns 109.04 per share, which the target said its board would unanimously recommend.

SimCorp shares surged nearly 39 to 734.50 as of 0838 GMT to trade just below the offer price.

The Danish financial software provider, which has more than 2,200 employees, posted operating profit of 126 million euros on revenue of 561 million euros last year.

SimCorp39;s business complements Deutsche Boerse39;s data analytics business, which could create a platform for investment management and boost recurring revenue from subscriptions, the German company said.

A Frankfurtbased trader, who was not authorised to speak publicly, said the deal looked expensive but seemed to be a good strategic step.

The negative reaction seems overdone to me, the trader said.

Deutsche Boerse said it had secured bridge loan financing with Morgan Stanley, which would be refinanced with existing cash and debt capital market instruments.

The takeover will go ahead if more than 50 of SimCorp shareholders accept the offer.

The aim is to close the deal in the third quarter this year after regulatory approvals, including merger controls in the EU and U.S. and sign…