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Mobile software firm Myriad Group confirmed a bid which was first mooted last month, to acquire messaging company Synchronica, in a deal which would value the latter at about £20.6m ($32.67m).

Synchronica said it had held talks with its would-be owner, but so far "the board has been unable to reach agreement with Myriad", adding that "the shareholders are advised to take no action" on the current bid. That presumably means the firm is holding out for a higher price, having rejected an earlier offer, but Myriad certainly sounds keen to win its prey.

In its statement, it said: "With an enhanced product offering, cross-selling opportunities, a strengthened IP portfolio and the potential for synergies, Myriad believes that the potential acquisition would enhance its position as a global player, serving more than 100 mobile operators and over 20 handset manufacturers and OEMs."

Myriad said that as of November 10 last year, the day before it made its first approach, Synchronica had a market capitalization of £12.1m ($19.2m), plus an obligation to pay Nokia $20.2m before the end of 2015 related to its acquisition of the Finnish giant's messaging unit. As of January 30 2012, Myriad had a market cap of around £136.9m and a cash balance of S$25m.

The proposed merger highlights that there is still considerable mileage in software which is embedded into handsets, often targeting non-smartphones and branded by operators. As well as its high profile products for running Android applications on other platforms, Myriad has a range of messaging and social net services for Java and featurephones. Synchronica would bring valuable new expertise and alliances, especially since its own $25m acquisition of Nokia's Operator Branded Messaging unit in July 2011.

This brought contracts with 10 north American carriers, serving 6m users, and software which was mainly preloaded on Nokia's low end Series 40 handsets. Synchronica has been working to extend this to third party clients like Gmail and MSN Messenger, and merge it with its own mobile messaging technology, to create a single platform suited to all kinds of cellcos. This would complement Myriad's social networking and messaging systems to provide a more complete solution to operators, especially in emerging markets.

"Companies such as Myriad and Synchronica ... are consolidating to provide better global reach in the face of a growing number of over-the-top competitors such as Facebook and Whatsapp," Martin Garner, analyst at CCS Insight, commented to Reuters when the first bid was revealed. "There is an opportunity for suppliers serving mobile carriers with messaging systems and services as the carriers fight back against losing messaging revenue to over-the-top players."

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