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GBST share price charges higher after FNZ Group takeover offer is recommended

The GBST Holdings Limited (ASX: GBT) share price has started the week on a positive note.

In late afternoon trade the financial technology company’s shares are up over 6% to $3.93.

Why is the GBST share price charging higher today?

Investors have been snapping up the company’s shares on Monday after its takeover saga took a new twist.

According to an announcement, GBST has entered into a binding scheme implementation deed with FNZ Group under which FNZ will acquire 100% of the shares in GBST by way of a scheme of arrangement.

The release explains that if the scheme is implemented, GBST shareholders will receive total cash consideration of $3.85 per share, which will be reduced by the cash amount per share of any special dividend paid by the GBST board prior to or upon implementation of the scheme.

This values the equity of GBST at approximately $269 million (assuming existing options and performance rights vest in full) and represents an attractive premium of 94.9% to the undisturbed closing price of the company’s shares on April 11. This is the last close price prior to the initial proposal from Bravura Solutions Ltd (ASX: BVS) on April 12.

What now?

The GBST board has unanimously recommended that shareholders vote in favour of the scheme in the absence of a superior proposal and subject to the independent expert concluding (and continuing to conclude) that the scheme is in the best interests of shareholders.

GBST’s chairman, Mr Allan Brackin, explained: “We are pleased to have now entered into a binding agreement for FNZ to acquire GBST at $3.85 per share on terms acceptable to the Board. FNZ’s offer represents a significant premium and provides a high degree of certainty of value for our shareholders through the cash offer and limited conditionality.”

FNZ managing director, Mr Adrian Durham, appeared to be very pleased to finally have an offer recommended by the GBST board and believes the two companies are a good fit.

He said: “We are pleased to have reached an agreement with the GBST Board that will deliver a great outcome for their shareholders. GBST has well established products, talented employees and deep relationships with major financial institutions in Australia and internationally. We look forward to working with the company to expand its product and service offering in both wealth management and capital markets, aligned with our global mission of improving investment and retirement outcomes for all people.”

Is it over now?

Whilst this latest FNZ Group offer has been recommended by the board, it is worth noting that the GBST share price is trading higher than the offer price. Which could be an indication that some investors believe previous suitors will be returning with further offers in the coming days. 

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended GBST Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.