Summary
The boards of ION and Fidessa are pleased to announce that they have reached an agreement on the terms of a recommended all cash offer pursuant to which ION Bidco, an indirect wholly owned subsidiary of ION Investment Group Limited, 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
The price of £38.703 in cash for each Fidessa Share 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, if the Dividend (as defined below) is approved, Qualifying Fidessa Shareholders will be entitled to receive and retain a final dividend and a special dividend in respect of the year ended 31 December 2017 together amounting to 79.7 pence in aggregate per Fidessa Share, which dividend will be paid on 7 June 2018 or, if earlier, the first settlement date in relation to the Offer following the Offer becoming wholly unconditional (the "Dividend"), without any reduction of the offer consideration payable under the Offer.
Aggregate entitlements of Fidessa Shareholders under the terms of the Offer shall be rounded down to the nearest pence.
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 21 February 2018;
- 48.6% to the Closing Price of £26.05 per Fidessa Share on 16 February 2018 (being the last Business Day before the Reference Date);
- 56.9% to Fidessa's three month volume weighted average share price of £24.66 per Fidessa Share to 16 February 2018 (being the last Business Day before the Reference Date); and
- 65.2% to Fidessa's six month volume weighted average share price of £23.43 per Fidessa Share to 16 February 2018 (being the last Business Day before the Reference Date).
The Offer implies an enterprise value multiple of approximately 4.7x Fidessa's recurring revenue and 25.9x Cash EBITDA for the year ended 31 December 2017.
ION Bidco believes that Fidessa represents an attractive opportunity to invest in a wellestablished business with a leading 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. ION Bidco believes that customers will greatly benefit from the integration of the respective products and from the increased investment in long term technology innovations.
ION Bidco also believes that the Offer provides Fidessa Shareholders with a compelling alternative to the Temenos Offer as it is an increase of £3.03 per Fidessa Share to the existing Temenos Offer.
The Fidessa Board, which has been so advised by Rothschild as to the financial terms of the Offer, considers the terms of the Offer to be fair and reasonable. In providing its advice to the Fidessa Board, Rothschild has taken into account the commercial assessments of the Fidessa Board. Rothschild is providing independent financial advice to the Fidessa Board for the purposes of Rule 3 of the Code.
Accordingly, the Fidessa Directors intend to recommend unanimously that Fidessa Shareholders accept, or procure the acceptance of, the Offer (or, if (with the consent of Fidessa and the Panel) ION Bidco exercises its right to implement the Offer by way of a Scheme, vote, or procure votes, in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the relevant general meeting of Fidessa Shareholders).
In light of the Fidessa Directors' intention to recommend the Offer, Fidessa has withdrawn its recommendation of the Temenos Offer and proposes to adjourn the Fidessa Shareholder meetings convened for 27 April 2018 to consider the Temenos Offer.
Accordingly, ION Bidco and the Fidessa Board believe that Fidessa Shareholders should accept the Offer.
ION Bidco has received support for the Offer from Fidessa Shareholders and persons interested (as defined in the Code) in Fidessa Shares in respect of a total of 9,751,759 Fidessa Shares representing, in aggregate, approximately 25.1 per cent. of Fidessa's ordinary share capital in issue on 19 April 2018 (being the last Business Day before the date of this Announcement).
This support comprises:
- irrevocable undertakings to accept the Offer from Lindsell Train Limited and Evenlode Investment Management in respect of a total of 8,215,326 Fidessa Shares representing, in aggregate, approximately 21.2 per cent. of Fidessa's ordinary share capital in issue on 19 April 2018 (being the last Business Day before the date of this Announcement); and
- irrevocable undertakings from Elliott International, L.P and Elliott Associates, L.P to request their relevant swap counterparties to accept the Offer in respect of a total of 1,536,433 Fidessa Shares representing, in aggregate, approximately 4.0 per cent. of Fidessa's ordinary share capital in issue on 19 April 2018 (being the last Business Day before the date of this Announcement).
Further details of the irrevocable undertakings received by ION and ION Bidco (including details of the circumstances in which the irrevocable undertakings will cease to be binding) are set out in Appendix III to this Announcement.
If, after the date of this Announcement, any dividend and/or other distribution and/or other return of capital (other than the Dividend) is announced, declared or paid in respect of the Fidessa Shares, ION Bidco reserves the right to reduce the consideration payable under the Offer by an amount up to the amount of such dividend and/or distribution and/or reduction of capital so announced, declared or paid.
The Offer shall be conditional upon valid acceptances being received in respect of Fidessa Shares which, together with any Fidessa Shares acquired by ION Bidco (whether pursuant to the Offer or otherwise), carry not less than 75 per cent. of the voting rights normally exercisable at a general meeting of Fidessa (calculated on a fullydiluted basis). The Offer is also subject to the satisfaction or waiver of the Conditions and to the further terms that are set out in Appendix I to this Announcement and will be set out in the Offer Document. The Conditions include the receipt of antitrust clearances from the relevant authorities in the UK and US (or lapsing of the applicable waiting periods), the receipt of regulatory clearances from the Financial Conduct Authority and other customary conditions.
Commenting on the 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 welldiversified mix of asset classes, geographies and products."
Commenting on the Offer, Andrea Pignataro, Chief Executive Officer of ION said:
"Fidessa's leading position in equities and derivatives trading solutions complement our Fixed Income and FX capabilities and will enable us to serve our customers more effectively across all asset classes and accelerate innovation."
The Offer Document, containing further information about the Offer, shall be published within 28 days of this Announcement (or on such later date as may be agreed by the Panel).
Subject to the satisfaction or, where applicable, waiver of all relevant conditions, including the Conditions and certain further terms set out in Appendix I to this Announcement and to be set out in the Offer Document, it is expected that the Offer will become wholly unconditional by August 2018. An expected timetable of principal events will be included in the Offer Document.
This summary should be read in conjunction with, and is subject to, the full text of this Announcement including the Appendices. The Offer will be subject to the Conditions and the further terms set out in Appendix I to this Announcement and to the full terms and conditions to be set out in the Offer Document. Appendix II to this Announcement contains the sources and bases of certain information contained in this summary and this Announcement. Appendix III contains certain details of irrevocable undertakings referred to in this Announcement. Appendix IV contains the definitions of certain terms used in this summary and this Announcement.
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