Bidding war for the Mainstream (ASX:MAI) share price intensified today

The Mainstream share price jumped today as the group may get yet another higher takeover offer.

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The Mainstream Group Holdings Ltd (ASX: MAI) share price jumped after management backed a takeover bid by Apex Group.

The specialist fund administrator for the financial services industry has now determined that the $2.80 a share offer from Apex is superior to a rival bid.

But investors are betting that the bidding war for Mainstream isn’t over. This is why the Mainstream share price jumped 2.2% to retest its record high of $2.84 in the last hour of trade.

Betting on a higher offer for the Mainstream share price

The higher bid is assumed to come from SS&C Technologies, Inc and SS&C Solutions Pty Ltd (together, SS&C).

SS&C and Mainstream signed a Scheme Implementation Deed (SID) that was amended on 11 April this year. Under the terms of the deed, Mainstream has notified SS&C of Apex’s superior offer that’s made on more favourable terms.

SS&C has until next Thursday to match or better the Apex proposal.

Six times is never enough

“Mainstream is continuing to work with SS&C in relation to the proposed scheme of arrangement under the terms of the SS&C SID and the Mainstream directors have not, as at the date of this announcement, withdrawn their recommendation of the scheme of arrangement with SS&C,” said Mainstream.

“Mainstream has not entered into any scheme implementation deed, conditional or otherwise, with Apex.”

Little wonder that the market is confident of a higher bid from SS&C. The suitor exercised its matching rights six times before!

Multiple bids sees Mainstream offer price surge 133%

The previous occasion saw Apex making a $2.75 a share offer for the Mainstream share price on 26 May. SS&C beat that offer by 1 cent on 1 June.

But SS&C has come a long way from its original $2 a share offer in April. It’s nice to be wanted!

The takeover drama didn’t even start with SS&C. The first suitor that came knocking was from Vistra Group.

First bid for the Mainstream share price

Vistra was first to sign a SID with a offer price of $1.20 a share before SS&C entered the rink.

Vistra had the right to match the offer but elected not to. It didn’t walk away empty handed though as it got a $1.7 million break fee from Mainstream. Small price to pay given the latest offer for its shares!

Boom times for M&A

Merger and Acquisition (M&A) activity is hotting up on the ASX. As reported earlier today, the Iress Ltd (ASX: IRE) surged on rumours that a bidder is close to showing its hand for the financial services group.

Ultra-low interest rates and rebounding economic activity are giving cashed up buyers a case of FOMO.

It isn’t only home buyers that are afflicted with this syndrome. But Mainstream shareholders won’t be complaining.

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Brendon Lau does not own shares mentioned in this article. Follow me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MainstreamBPO Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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