ACCOUNTANCY software company Sage has walked away from the biggest acquisition in its history.

The Newcastle company said it would not be drawn into a £400m bidding war for rival Norwegian business Visma, after its offer was beaten by private equity firm HgCapital.

In a statement yesterday, Sage said its original offer of £334m for Visma, which lapses today, would not be raised.

Sage thought it had the support of the Visma board, but directors of Visma withdrew their recommendation earlier this month because they no longer considered the bid to be fair.

The Visma board took the decision after revenues rose by a quarter between January and last month, while earnings increased at a rate of 43 per cent - well beyond its expectations and those of analysts.

Visma signalled that a number of key shareholders were unhappy with the Sage deal because they felt the UK company was trying to gain control "on the cheap".

Bridgewell Securities analyst Kevin Ashton welcomed Sage's decision not to raise its bid.

"Although Sage's offer for Visma has been outbid by a modest amount - eight per cent - we welcome the decision not to raise the offer, however much strategic sense Visma makes," he said in a statement.

"Sage continues to show exemplary regard for shareholder value and, sensibly, is not setting a precedent for the many potential acquisitions we see ahead."

Visma has 200,000 customers and is the largest Scandinavian seller of accountancy software to small and medium-sized companies.

In its offer document, HgCapital said the Visma board found its bid of £380m "interesting from an industrial perspective".

HgCapital has offices in the UK and elsewhere in Europe and has funds under management of about £1.73bn. It made the offer through its Engel Holding subsidiary.