UBS’s Sujit Dey cracks open history books on Iress’s M&A disclosures
UBS’s hedge fund sales desk was out making the most of a slow day on the ASX, pushing Iress as a takeover target after Street Talk’s March 5 revelation that US private equity firm Thoma Bravo has enlisted Jarden for a potential tilt.
Iress CEO Marcus Price. Wayne Taylor
Nearly 1½ months on from our story, Sujit Dey reckons Iress’s share price has given back the gains from the whiff of M&A – making the stock a red-hot buy.
His thesis? History says Iress is slow with its disclosures; buyers don’t have much to lose if Thoma Bravo’s interest doesn’t pan out into a full-fledged bid; and the AFR is usually right. His words, not ours.
“I really like the set-up of this trade. If no deal occurs, the price doesn’t seem to have anything in it anyway. But if a deal comes through, you could make a decent amount of money. Market leading tech is a hot sector for M&A and IRE is in this sweet spot,” he wrote in the note mailed out market open.
Iress stock has fallen 25.5 per cent in the past year to close at $7.665 a share on Monday. EQT Partners’ unsuccessful bid in 2021 was at implied value of A$15.91 cash per share.
“...Like 3 years ago, the AFR was first to break the story and the AFR is generally pretty accurate. IRE also dismissed it this time around but if you look back at 2021, it took 6 weeks before IRE disclosed that it had eventually been approached. Therefore, maybe IRE has already been approached and it won’t make an announcement until something firms up? This is the approach it took in 2021,” he wrote.
We’ll sign off by reiterating our March 5 intel: Thoma Bravo has indeed hired Jarden to look at Iress, but had not made a formal approach to the company or defence adviser Goldman Sachs.
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