The IRESS Ltd (ASX: IRE) share price has come under pressure on Friday and is deep in the red.
At the time of writing, the financial technology company’s shares are down 13% to $11.82.
Why is the IRESS share price sinking?
Investors have been selling down the IRESS share price today following an update on takeover talks with EQT.
Last week, IRESS rather ominously revealed that it had granted EQT an additional 10 days of exclusivity to complete its due diligence. This came following the conclusion of a 30-day exclusivity period that started on 11 August.
IRESS granted EQT due diligence last month after it increased its takeover approach to $15.91 cash per share.
What’s the latest?
As you might have guessed from the IRESS share price performance today, discussions haven’t gone well.
According to today’s release, the discussions between IRESS and EQT have now concluded and the parties have been unable to agree a transaction.
IRESS’ Chair, Roger Sharp, commented: “In our 11 August announcement, Iress advised shareholders that there was no certainty the indicative proposal would result in a binding or formal offer from EQT. Nevertheless, the Board took the view that it was in the best interests of shareholders to engage further with EQT in relation to the indicative proposal.”
“The announcement today in no way impacts our strategy to accelerate growth and returns to shareholders, as detailed in our announcement of 29 July 2021 and presented at our investor strategy day.”
The company’s Chair remains positive on the future. He added: “Our aim has been and remains, to double net profit after tax by 2025, with potential for further upside. We have built solid foundations to capture more market share in large addressable markets and are focused on executing the plan. With our strong operating businesses, favourable industry trends and growth investments, we have a positive outlook.”
IRESS has reaffirmed its guidance for constant currency segment profit to be between $164 million and $168 million in FY 2021. Though, there will be one-off non-operating costs related to the transaction, which is expected to be in the order of $4 million to $5 million pre tax.
Despite today’s decline, the IRESS share price is still up 10% year to date.