Fidessa agrees terms of £1.5bn Ion Investment bid; Temenos out in the cold

Financial technology group Fidessa agreed the terms of a £1.5bn offer from Dublin-based Ion Investment Group on Friday, just hours before the deadline to make a formal bid.

Under the terms of the deal, Fidessa shareholders would receive £38.703 in cash for each of their shares and be entitled to receive and retain a final dividend and special dividend for the year to the end of December 2017 amounting to 79.7p per share.

The offer price represents a premium of around 8.5% to the £35.67 a share offer announced by Switzerland's Temenos on 21 February and a 49% premium to Fidessa's closing price on 16 February.

Fidessa, which had already recommended that its shareholders accept Temenos’ £1.4bn bid, said it was withdrawing its previous recommendation and now intends to unanimously recommend that shareholders accept Ion's proposal.

Fidessa chairman John Hamer said the Ion offer provides its shareholders "with even greater value in cash for their shares" than the Temenos offer.

"Ion shares our vision of driving workflow automation in the world's financial markets and has a highly complementary business to ours: Fidessa is a leader in equities and derivatives and Ion is a leader in fixed income and FX. The combination of the businesses has a compelling strategic rationale and will support a well-diversified mix of asset classes, geographies and products."

Atif Latif, director of trading at Guardian Stockbrokers, said: "Investors will be pleased at the increase in premium. Ion has captured a business on the cusp of strong revenue growth with the potential to move into other asset classes that complement the areas that Ion look to bolt on and maximise as they continue on the acquisition trail.

"It represents a good value deal for both and Ion is gaining a company that exhibits a strong balance sheet, little debt and recurring revenue. Granted some mutual crossover will be expected but the benefits outweigh the concerns. We continue to see more scope for more deals in the EU Software space to materialise."

At 1510 BST, the shares were up 0.3% to 4,010p.