Ion Investments has upped the ante in the chase for UK trading systems supplier Fidessa (FDSA) by pitching its own buyout that trumps rival offers.
It is just a proposal at this stage not an actual bid, having approached Fidessa’s board, but it revolves around a £39.50 per share offer, including Fidessa 2017 dividends.
Banking software company Ion has until 5pm today to either stump up a firm offer, or walk away.
Ion’s interest comes as no surprise to Shares. We first mooted its likely interest back in February, when Fidessa first emerged as a takeover target.
WHY SELL NOW
Fidessa’s share price is up 50p on Friday (20 April) at £40.50. That’s barely a 1% increase on yesterday’s close. This possibly indicates that the market sees little bid upside from here despite the multi-party battle for control.
Bids close to £40 would seem pretty full already given Fidessa’s trading track record, which has seen the stock largely trapped in an approximate £20 to £25 range for years. Current offers already imply an approximate 16-17-times enterprise value to earnings before interest, tax, depreciation and amortisation (EV/EBITDA) valuation.
Yes, higher bids may yet emerge, but one has to wonder just how much more buyers will be willing to pay. For some, banking a share sale in the market at a 100p per share premium to the highest (so far) offer may well prove sensible.
Others may feel that their downside is capped sufficiently to warrant a wait and watch approach.
THE BUYOUT STORY SO FAR
To recap, Fidessa was originally targeted by Switzerland-based Temenos, the global banking software company. The pair agreed a rough £1.4bn deal that offered Fidessa’s shareholders £35.67 per Fidessa share in cash, plus the previously announced second half 2017 and special dividend worth 79.7p per share, taking the overall bid to £36.467.
Earlier this month Fidessa revealed talks with two other parties, one offering a deal worth £38.297 per share, plus 79.7p dividends, a rough 5% premium to the previously deal.
Nasdaq-listed banking software provider SS&C is also rumoured to be casting its eyes over Fidessa.
