Fundtech Ltd's (Nasdaq: FNDT; TASE: FNDT) acquisition of S1 Corporation (Nasdaq: SONE) is in jeopardy. ACI Worldwide Inc. (Nasdaq: ACIW) today offered to acquire S1's outstanding shares for $540 million. Fundtech plans to acquire S1 to create a $700 million company.
S1's share price jumped 31% at the opening on Nasdaq today to $9.29, while Fundtech's share price fell 7.5% to $17.72, giving a market cap of $2.67 million. The share price fell 6.8% on the TASE today to NIS 60.40.
Fundtech and its parent company Clal Industries and Investments Ltd. (TASE: CII) have not yet responded to the new offer, although they will presumably do so.
Fundtech, founded and run by CEO Reuven BenMenachem, is a unit of Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH). The company provides clearance and automated payment processing solutions for financial institutions. It announced the merger with S1, which operates in the same business, in a share-swap deal, a few weeks ago.
The merger is subject to approval by the shareholders of both Fundtech and S1.
ACI Worldwide's offer upsets the applecart. It is offering $9.50 per share for S1, a 33% premium on yesterday's closing price. The offer could be interpreted as an attempt to block S1's merger with Fundtech.
ACI Worldwide is a competitor of Fundtech. It has a market cap of $1.19 billion. Under the offer, S1 shareholders can chose to receive cash and/or stock for their shares, provided that the cash component is 60%. If a deal is closed, S1 shareholders will own 15% of the combined company and ACI shareholders will own 85%.
"ACI's proposal would provide S1 shareholders with a substantial premium and immediate cash value for their investment in S1, as well as the opportunity to participate in the significant upside potential of a combined ACI-S1," said ACI president and CEO Philip Heasley, hinting at the S1-Fundetch merger. He added, "With S1, we believe that ACI would further enhance its current position as a global leader."
"We are confident S1 shareholders will share our strong belief that ACI's premium proposal is superior to and provides S1 shareholders with significantly greater value than the pending transaction with Fundtech," Heasley added. "We expect S1's Board to recognize the considerable financial and strategic benefits to S1 and its shareholders inherent in a combined ACI-S1, and ACI is ready and willing to complete this transaction and we are prepared to do what is necessary to make that happen."
Published by Globes [online], Israel business news - www.globes-online.com - on July 26, 2011
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