DST Systems Inc. (NYSE: DST) shares gained 14.2% to $55.19 after Reuters reported that the accounting-software company had drawn interest from private equity firms in recent months. Volume for the stock was 1.5 million shares, compared to an all-day average of 288,000.
The exclusive story that broke this morning quoted sources close to the situation as saying the Kansas City-based DST had received several buyout overtures from private equity firms in recent months, including one led by activist investor Russell Glass.
Glass, founder and head of New York investment firm RDG Capital, told Reuters he had teamed up with a private equity firm and approached DST management within the last 30 days to talk about a buyout of the diversified data processing company in the mid-$60s per share range.
DST also held discussions in March and April with another private equity firm that was also eyeing a mid-$60s price range, a source close to the situation said.
The news agency also quotes Glass as saying he was rebuffed by DST management on grounds that the company did not want to sell while it is grossly undervalued.
The other private equity firm had also been rejected, while the mid-$60s range appears to be the starting point, said the source, adding, “You have to be prepared to bump or compete with other buyers.”
The source requested anonymity because the talks are not public. A DST spokeswoman declined to comment.
DST Systems, Inc. provides sophisticated information processing and computer software products and services to support the mutual fund, investment management, insurance and healthcare industries.