Fidessa recommends acquisition offer by ION

Maria Nikolova

In light of the offer by ION, Fidessa has withdrawn its recommendation of the Temenos offer.

About a fortnight after Fidessa Group plc (LON:FDSA), a provider of trading, investment and information solutions to the financial services sector, said it had received approaches from two separate third parties whose offers for Fidessa were at a premium to the Temenos offer, the company has decided to recommend the offer made by ION Bidco, an indirect wholly owned subsidiary of ION Investment Group Limited.

In a filing with the London Stock Exchange, the boards of ION and Fidessa today announce that they have reached an agreement on the terms of a recommended all cash offer pursuant to which ION Bidco shall offer to acquire the entire issued and to be issued ordinary share capital of Fidessa.

Under the terms of the Offer, Fidessa Shareholders will be entitled to receive £38.703 in cash for each Fidessa Share. This values the entire issued and to be issued share capital of Fidessa at approximately £1.5 billion on the basis of a fully diluted share capital of 39,133,650 Fidessa Shares.

In addition, qualifying Fidessa shareholders will be entitled to receive and retain a final dividend and a special dividend in respect of the year ended December 31, 2017 together amounting to 79.7 pence in aggregate per Fidessa Share. In aggregate, Qualifying Fidessa Shareholders will receive £39.50 for each Fidessa Share, comprising the cash consideration and the Dividend.

The price of £38.703 in cash for each Fidessa Share represents a premium of approximately 8.5% to the current offer price of £35.67 per Fidessa Share from Temenos which was announced on February 21, 2018. The price of £38.703 also represents a premium of 48.6% to the Closing Price of £26.05 per Fidessa Share on February 16, 2018.

The Offer implies an enterprise value multiple of approximately 4.7x Fidessa’s recurring revenue and 25.9x Cash EBITDA for the year to end-December 2017.

Regarding the rationale for the deal, ION Bidco states that it believes Fidessa represents an attractive opportunity to invest in a well-established business with a strong position in equities and derivatives trading solutions. ION Bidco believes that a combination with Fidessa will uniquely position the companies to drive innovation in trading technology and automation across all asset classes.

The Fidessa Directors plan to recommend unanimously that Fidessa Shareholders accept, or procure the acceptance of, the ION offer. Accordingly, Fidessa has withdrawn its recommendation of the Temenos Offer.

John Hamer, Chairman of Fidessa said:

“The Board of Fidessa is pleased to recommend ION’s cash offer for Fidessa which is at an 8.5% premium to the Temenos proposal and provides our shareholders with even greater value in cash for their shares. 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.”

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