French financial IT firm Linedata says it will maintain its offer to acquire Canadian investment technology house Financial Models Company (FMC) in the face of a competing bid from FMC chief executive officer and co-founder Stamos Katotakis.
Katotakis last week met a deadline imposed by fellow shareholders BNY Capital and estranged director William Waters to raise a C$12.20 per share cash bid for their combined 42% shareholding in the firm. ABRY Mezzanine Partners - an investment fund controlled by Boston private investment firm ABRY Partners - has committed to provide the funding, which values FMC at C$135 million.
Under a shareholder's agreement, the FMC board are bound to accept the Katotakis bid, despite an improved C$145 million counter-offer tabled by Linedata.
The French firm says an independent committee of the board of directors of FMC, which is currently assessing the Katotakis offer, has encouraged Linedata to maintain its offer. The FMC board has agreed a $3 million break fee with Linedata if its offer is overturned.
In a statement, Linedata says: "Linedata Services is of the view that the purported Katotakis offer does not comply with applicable law and that certain FMC shareholders who together hold more than 50% of the FMC shares currently outstanding continue to be contractually committed to tender their FMC shares to Linedata's offer notwithstanding the purported Katotakis offer."
Linedata initially approached Katotakis about a potential takeover in July last year, but talks petered out in October, provoking a bitter boardroom battle for control of the Canadian firm.