IRESS (ASX:IRE) share price rockets 16% on new takeover proposal

IRESS has received another takeover approach. Second time lucky?

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The IRESS Ltd (ASX: IRE) share price is far and away the best performer on the S&P/ASX 200 Index (ASX: XJO) on Thursday.

In morning trade, the financial technology company’s shares were up as much as 16% to $14.54.

The IRESS share price has dropped back a touch since then but currently remains 13% higher at $14.15.

Why is the IRESS share price rocketing higher?

Investors have been bidding the IRESS share price higher today after it revealed the receipt of a takeover approach from earlier this month.

According to the release, on 4 July EQT Fund Management made a confidential, unsolicited, non-binding and indicative proposal to acquire IRESS via a scheme of arrangement at a price of between $15.30 and $15.50 cash per share. This represents a 22.3% to 23.9% premium to the IRESS share price at yesterday’s close.

This is the second offer that EQT Fund Management has made, with IRESS rejecting a $14.80 per share proposal received on 18 June. The IRESS Board rejected that offer as it was not considered to be in the best interests of shareholders.

What about the latest offer?

IRESS revealed that following careful consideration, including obtaining advice from its financial and legal advisers, the IRESS Board unanimously concluded that the new proposal was conditional and did not represent compelling value for shareholders.

However, it did inform EQT Fund Management that it was prepared to provide it with access to limited non-public information. This is so EQT can develop a proposal that is capable of being recommended to shareholders. This information has now been shared with EQT after the two parties entered into a confidentiality and standstill agreement.

While discussions are continuing, management warned that there is no certainty that they will result in a revised proposal from EQT.

As a result, the IRESS Board recommends that shareholders take no action in relation to the proposal. In the meantime, the company will continue to keep shareholders and the market informed of developments.

The IRESS share price is now up 32% in 2021.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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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