20th Apr 2018 18:15
LONDON (Alliance News) - Temenos Group AG said Friday that it will not be amending the terms of its offer for Fidessa Group PLC.
It "does not believe that it would be in the best interests of Temenos shareholders" to amend the offer it made for Fidessa February 21.
German software firm Temenos' made an offer in February worth 3,567.00p per share in cash, valuing Fidessa at around GBP1.4 billion. Fidessa shareholders were to meet next Friday to vote on the Temenos offer but that has now been adjourned.
Temenos said that if Fidessa plans to adjourn its convened meeting to discuss the Temenos offer then its proposed acquisition will lapse.
Temenos also said it has given approval for a share buyback of up to USD250 million to be launched in the second quarter of 2018. The buyback will be funded through Temenos' "strong cash flow generation" with the company's leverage expected to be to mainted at 1-1.5 times earnings before interest, taxes, depreciation, and amortization by year end. It intends to use the repurchased shares for potential acquisitions.
Temenos' announcement comes on the back of Fidessa agreeing to ION Capital UK Ltd's offer.
ION confirmed it had made GBP38.703 proposal in cash for trading and investment management system firm Fidessa's 40.1 million shares, an offer that is lower than Fidessa's current market price.
The proposed share price values Fidessa at about GBP1.50 billion with shareholders entitled to a final dividend and special dividend for 2017 totalling 79.70 pence each.
ION believes that their offer provides Fidessa shareholders with a "compelling alternative" to the Temenos offer as it is an increase of £3.03 per Fidessa share.
The price of GBP38.703 in cash offered for each Fidessa share represents a 8.5% increase in the Temenos offer. A 49% increase to the closing price of GBP26.05 per Fidessa share on before the announcement of the Temenos offer.
It is a 57% jump on Fidessa's three month volume weighted average share price of GBP24.66 per share. It is also a 65% increase of Fidessa's six month volume weighted average share price of GBP23.43 per share.
Shares in Fidessa closed up 1.4% at 4,055.00 pence Friday afternoon.
Andreas Andreades, Temenos executive chairman, said: "We have a very significant addressable market in the banking segment which is seeing strong growth underpinned by multiple structural drivers including digitisation, regulation and the move to open banking. We are the leader in this winner-takes-all market, having won all the key strategic deals, and expect our business to continue to achieve double-digit organic revenue growth annually as we pull further ahead of the competition.
"In this context we decided it was not in the best interest of our shareholders to raise our offer price for Fidessa. I am confident we will continue delivering very strong shareholder value as we grow the business and are in an excellent position to take advantage of other opportunities to enter adjacent segments as they arise in a manner that will create exceptional value as we are doing in our core business, and capture a greater share of the IT and software spend of banks." Andreades added.
Related Shares:
Fidessa Group