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Iress Ltd (ASX:IRE) has soared to the top of the top gainers’ board on Friday, its share price posting a +12.2% rise in early afternoon trades, as the company confirms media reports of buyout bids from Blackstone.
Iress, an old-school (well-established if you prefer) fintech company has long been listed on the bourse, with the $1.75B market cap company providing software at home and in US, EU, and elsewhere.
Readers of HotCopper will likely be familiar with Iress Ltd as itself a provider of ASX market data, and that for other international equity markets broadly. It produces products that aren’t entirely unlike what you’d get on a Bloomberg terminal, to save time on explanation.
At any rate, that puts into clear context why US private equity giant Blackstone might be sniffing around the traps. And “might be” isn’t the correct term to use anymore, because Iress came out on Friday and confirmed the rumours are true.
“Iress’ Board of Directors confirm that it had considered a prior approach at a price of A$10.50 cash per share1 from Blackstone in relation to a potential acquisition. That offer was withdrawn,” the company wrote on Friday.
“Iress is currently in the early stages of engagement with Blackstone and Thoma Bravo in order to ascertain whether an offer can be made which can be recommended by the Iress Board.”
Thoma Bravo, for its part, is another private equity firm that specialises in software.
At any rate, the climb to $9.40/sh is a sign of conviction in the buyout proposal from investors, even though right now, the proposal isn’t exactly clear. While Iress said there’s no certainty that a deal will go through, the writing appears to be on the wall for many traders.
Especially because it’s got none other than Goldman Sachs on board as an adviser.
And of course, there’s context there, too. As I like to point out, M&As are always stories of one struggling company been eaten up by another, and looking at Iress’ YTD performance, it’s up less than +1% as at 1.30pm AEST.
It’s underperformed the tech sector by -45% YoY, and the XJO by -20%.
Make of that what you will.
IRE last traded at $9.40/sh.
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