New York-based private equity fund Blackstone was believed to be looking at lobbing a bid for Iress that valued the stock at about $2bn.
But the problem for Blackstone is that’s where Iress is trading now.
DataRoom understands that the private equity group offered somewhere around $10 or $11 a share.
On Thursday, the shares closed at $10.49.
The stock would likely have to return to the levels it was trading at about a year ago before a bid of that value would be considered, and that was when the company was travelling through rough waters with disappointing results.
It means that this shapes as a waiting game for Blackstone, and Iress needs to deliver a strong set of numbers at its results on Monday to prove it’s worth a lot more.
A trading update on July 22 on earnings expectations was seen as a defensive play by Iress to Blackstone’s interest.
It is understood various parties have a running a file on Iress, including the Jarden-advised Thoma Bravo, while EQT has made efforts to buy the business in the past – and keeps an open file on Iress. Bain Capital has been active in the space.
Kohlberg Kravis Roberts has also been an active buyer of Australian technology companies.
Technology is considered one of the key areas of investment for Blackstone, which is also lining up in the final round of the contest for $5bn data centre operator AirTrunk. Final bids are due the week beginning August 26.
Iress provides software and services for trading and market data, financial advice, investment management, mortgages, superannuation, life and pensions and data intelligence.
It has at least 65 per cent of the Australian wealth advice market.
EQT bid $3.1bn for Iress, or $15.91 per share, in 2021 but walked away after carrying out due diligence.
Shares crashed almost a year ago by 36 per cent to $6.44 when it delivered a disappointing result for the 2023 financial year and suspended dividends.
Iress counts Goldman Sachs as its defence adviser.
Buyout funds are thought to be attracted to Iress for its high cashflow, defensive revenue and what have been underperforming assets, but the company’s management is said to be focused on improving performance.
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