Blackstone forms dedicated bidding vehicle in major step towards Iress deal

A new company set up by Blackstone is thought to be targeting Iress.

Blackstone has set up a new company that appears to be one to bid for a target which may be Iress, in what could be further evidence that the New York powerhouse has been in strong pursuit of the $1.65bn financial services target.

According to documents filed with the Australian Securities & Investments Commission, Blackstone set up Ogra Bidco PTY Ltd on November 21.

While it’s not entirely evident that the entity was set up to buy Iress, the timing of it and the Blackstone executives listed as directors of the entity, who are from its technical team, indicate that it’s likely that is what it is intended for.

Private equity firms are unlikely to set up such structures lightly, given it can cost about $250,000 to do so.

Iress, advised by Barrenjoey and Goldman Sachs, told the market on November 25 that it continued to engage with multiple parties for a potential bid that could be recommended by the board.

But sources say that the party that had been undertaking by far the most work on the target has been Blackstone, and it may even have preferred bidder status.

However, since that time, the share price of Iress has fallen from over $9 to $8.84.

The Iress board is understood to be pushing for at least $11 per share, valuing the company at over $2bn, but Blackstone earlier proposed $10.50 per share.

While it is heavily engaged, some sources say that a deal at a price beyond its earlier offer may not stack up.

Blackstone, advised by Macquarie Capital, signed a non-disclosure statement to gain confidential information to carry out its due diligence in November, which includes interviews with staff as part of its assessment of the investment.

The Australian-listed Iress told the market on October 17 that it was engaging with new third parties in addition to those that had previously expressed interest about a buyout that could be recommended by the board.

Iress provides software and services for trading and market data, financial advice, investment management, mortgages, superannuation, life and pensions and data intelligence.