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Fidessa rides on bidding war

The software group delayed the shareholder meeting to approve Temenos’s offer, after two new bidders came forward
April 5, 2018

For Swiss banking software specialist Temenos (SW:TEMN), it was almost in the bag. Fidessa (FDSA) had accepted its £1.4bn takeover offer on 21 February, and the board of the UK financial data company planned to recommend the transaction to shareholders for their approval on 5 April. That is until two rival bidders came forward at the 11th hour.

IC TIP: Hold at 4045p

Both parties were initially anonymous, but – prompted by press speculation – Fidessa later revealed that they were ION Investment Group, an automation software specialist used by financial institutions and central banks, and SS&C, a financial services technology company. Both potential offers are at a premium to Temenos’s proposed package – which entailed, at last count, £36.467 per share in cash, including a £35.67p cash consideration and 79.7p dividend. Fidessa has not yet received proposed terms from SS&C, but ION’s possible offer would see shareholders receive £38.297p, upping the cash consideration to £37.50 and thus representing a 5 per cent premium to Temenos’s offer.

News of the developing bidding war lifted shares in Fidessa by more than a tenth, taking the closing price of 4,170p significantly higher than any offer so far. Seemingly, investors are setting their sights on an even more generous deal – but which party will prevail? For now, Fidessa has postponed its scheduled investor meeting.