Fidessa officials say that SS&C Technologies and ION Investment Group are behind the last-minute counter-offers to the Temenos bid.
The “Fidessa Chronicles” plot thickens as the trading systems vendor has revealed that SS&C Technologies and ION Investment Group are the formerly secret suitors that put forth offers earlier this week, countering the bid from Temenos.
In the latest announcement, “Response to press speculation,” the Fidessa board “notes the press speculation in relation to potential bidders for Fidessa,” according to an April 5 message.
“Fidessa confirms that the party identified as Party A in Fidessa’s announcement of 3 April 2018 is ION Investment Group Limited (ION), and the other party is SS&C Technologies Holdings, Inc. (SS&). This announcement has been made without the consent of ION and SS&C,” according to the latest announcement.
Days before, the pending marriage between Fidessa and Temenos, announced in late February, was put on hold when two, unidentified eleventh hour suitors rushed offers to acquire Fidessa Group.
The two offers caused the Fidessa board to postpone a shareholder vote on the Temenos offer, which had been slated for April 5.
The Temenos offer, announced February 21, received initial support from the governing boards of Fidessa and Temenos, and is an all-cash, $1.96 billion (£1.4 billion) acquisition whereby Temenos would own Fidessa via the subsidiary Temenos Bidco, officials say.
The Temenos proposal is intended as an effort to capitalize on “a huge opportunity to combine the complementary product strengths” of the two vendors, officials said at the time. The initial Temenos offer specifies that Fidessa shareholders would get £35.67 ($49.81) in cash for each Fidessa share, according to both vendors.
Fidessa officials are now mulling the offers from SS&C and ION against the Temenos overture.
“Under the terms of one of the possible offers (the ‘Party A Possible Offer’), Fidessa Shareholders would receive in aggregate £38.297 [$53.6254] for each Fidessa Share comprising £37.50 cash consideration and the £0.797 Dividend. The Party A Possible Offer represents a 5.0% premium to the Temenos Offer,” according to the latest Fidessa message to investors.
The Party A offer is from ION and officials there did not respond to multiple requests for comment.
ION was in the spotlight in early February when it announced that it is acquiring Openlink Financial, a financial and energy trading systems and risk management software vendor. The move expands ION’s footprint in the energy markets and financial services. Although all parties refused to identify the price tag, ION purchased Openlink from private equity firm Hellman & Friedman, which was expanding Openlink and its wares, adding a cloud platform and analytics, before finding a buyer. ION makes trading and workflow automation software solutions for financial institutions, central banks, governments and corporations.
For now, Fidessa officials have not yet provided details about the offer from SS&C, which is a giant in the investment services, systems and software industry. Officials at SS&C, which has grown via acquisition, acknowledge the offer but decline to provide further details.
“Discussions with the third parties are ongoing and there can be no certainty that a formal offer from either will be forthcoming or as to the terms of any such offer,” according to Fidessa’s April 3 message to investors. In addition, the postponement of the shareholder vote does not mean that Temenos is out of the running, according to the Fidessa message. “However, it is a condition of the Temenos Offer that the Scheme Court Meeting and the General Meeting are held on or before 27 April 2018,” Fidessa officials add.
Fidessa officials say that they “will announce the deadline by which the third parties referred to above must clarify their intentions in relation to Fidessa. A further statement will be made in due course.”
FTF News reached out multiple times to Temenos officials for comment, but nothing was received by deadline.
When Temenos officials made their initial overture, they argued that the combination of the product sets of Temenos and Fidessa would be complementary. In addition, the Temenos management said it foresees “significant opportunity in combining Fidessa’s expertise in SaaS [software as a service] with Temenos’ best in class sales, development and delivery operations. This combination will allow Fidessa’s products to benefit from a larger client base and organization and to realize incremental growth opportunities.”
Fidessa officials offer trading platform products and services that “cover the whole life cycle of the trading process for both the buy-side and sell-side, from low latency trading tools to settlement, compliance and risk management,” according to the vendor’s website.
Although initially thought of as a front-office vendor, the company has made many forays into the post-trade operations arena, and has been a proponent of FIX-based post-trade services.
Fidessa describes a key post-trade offering as an “industry driven utility exclusively for the ETD [exchange-traded derivatives] post-trade workflow that transforms the traditional legacy process into an automated T+0 trade confirmation workflow for buy-sides, clearing brokers and executing brokers.”
The Fidessa Affirmation Management System (AMS) is a utility “dedicated to helping buy-side and sell-side firms improve post-trade efficiency in ETDs, lower running costs and reduce operational risk,” Fidessa officials say. The AMS offering targets back-office processes via “same-day tripartite confirmation of ETD trades, reducing operational risk by giving greater surety of the trading position.”