Iress is in talks over a potential sale to EQT Fund Management after its board knocked back two initial bids to purchase the Australia-based financial software firm.
In the UK the firm is one of the main providers of sourcing software for protection insurance products and also operates systems for the mortgage advice process.
Iress confirmed it had received a “confidential, unsolicited, non-binding and indicative” proposal from EQT Fund Management to buy all Iress shares for between A$15.30 and A$15.50 per share – valuing the the business at around A$2.63bn (approximately £1.4bn).
It’s shares jumped 13% on the day after the news was revealed, to close trading on the Australian Stock Exchange at A$14.25 each, valuing the business at A$2.42bn.
This was up from A$12.51 at the close yesterday, with the fresh bid placing a 23% premium above yesterday’s value.
The firm’s board rejected the offer but said it had given EQT limited non-public information so “it can develop a proposal that is capable of being recommended to shareholders”.
It said that after careful consideration which included consultation with its financial and legal advisers, it “concluded this latest proposal also does not represent compelling value for shareholders”.
The board had already rejected a previous bid placed on 18 June 2021 for A$14.80 per share.
‘Greater opportunity than anticipated’
Iress was also far more bullish on its future, announcing the launch of a A$100m share buy-back programme and saying it believed it had previously undersold the opportunities available to it.
In a statement, Iress chief executive Andrew Walsh said it was clear “that the opportunity for Iress is greater than previously anticipated and current consensus”.
“We have built solid foundations enabling us to capture more market share in large addressable markets. We are executing our growth strategies including in the United Kingdom, in superannuation and for investment infrastructure.
“In completing the transition to a single technology platform we will also achieve greater operational leverage and speed to market.”