Bid for Fidessa? About £588 million market cap at £16/share. Throw on a premium – say 20% to take it to about £700 million.
A double or quits bet on the front office trading systems market. The GL acquisition cannot be going well; why not scoop up the main competition? Price earning of about 20. For year ended 31st December 2010 Fidessa made a £40 million profit. That’s a decent return on equity in a downturn and beats the hell out of a bank account.
Massive synergies possible – basically you just shut down all of GL Trade and Brass and most of Front Arena. Keep the Clearvision product offering. Integration costs will be high – closing down the Tunisia and Serbia development sites and pretty much all of the Paris based staff.
Do I expect Sungard to do it? 20% chance at best. But if you cannot beat ’em, buy ’em! At the moment Fidessa are eating their lunch on a drip-by-drip basis. This would be a transformational acqusition in the true sense, since it would transform Sungard from a dying sclerotic business to being Fidessa+a few bits left from the Sungard Trading world. Just have to make sure that the staff retention packages are enough to keep the Fidessa “magic/inner circle” onboard but not to much to let them get lazy.
Disclosure: I know people at both Fidessa and Sungard, I have not discussed this article with them and have no information other than market knowledge.