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arrangement under the terms of the SS&C SID and the Mainstream directors have not, as at the date of this announcement, withdrawn their recommendation of the scheme of arrangement with SS&C,” said Mainstream.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.