Activist investor said to view $2 billion Fidessa bid as too low

Following the announcement that Fidessa Group, the UK provider of trading, investment and information solutions, has agreed to a takeover by Swiss banking software group Temenos, activist investor Elliot Management Corp. is said to view the bid as too low. Elliott Management Corp., having acquired a stake in Fidessa, believes that a $2 billion bid from Temenos undervalues the UK computer-software provider, according to people familiar with the matter. The hedge fund run by billionaire Paul Singer is taking the stance that Fidessa could fetch a higher price from other software makers and private equity firms, said the people, asking not to be identified because the matter is private. It doesn’t currently plan to oppose the deal, but believes there are other potential buyers and wants the company to be open to rival offers, the people said. The New York-based activist, which disclosed on Wednesday that it has built a stake of almost 5% in the software firm, declined to comment on its plans for the holding. Representatives for Temenos and Fidessa also declined to comment. Shares of Fidessa jumped 5% yesterday to close at a record high of 37.50 pounds after Elliott’s stake came to light, trading above the 35.67 pounds apiece offered by Temenos. Temenos, whose platform helps financial institutions become more digital, has been growing through acquisitions as banks outsource technology functions and customers move online. Elliott, which has been invested in Fidessa since the middle of last year, believes the company could double its profit margin and grow faster, the people said. They also said that there are other well-capitalised software firms that could achieve greater benefits from combining operations with Fidessa. Temenos and Fidessa expect the deal to be completed in the first half, resulting in annual pretax cost savings of $60 million. The transaction would add to earnings this year for Temenos, which plans to reduce its net debt through the capital markets before or shortly after the takeover. [Bloomberg]