KC-based DST Systems may be sold; stock soars after temporary trading halt

Nasdaq halted trading in shares of Kansas City-based DST Systems Wednesday after an unconfirmed report the company may be sold.

Shares jumped more than 20 percent after trading resumed. A DST spokeswoman said the company would not comment on rumors.

Reuters reported that Connecticut-based SS&C Technologies Holdings Inc. was in “advanced talks” to buy DST Systems, which has roughly 4,000 Kansas City area employees among 16,000 globally. Reuters cited people familiar with the situation.

Those sources said a deal could be announced this week if “negotiations are successful.” They also said the sale would be at $84 a share.

DST shares had been trading around $66 before the report. Shares gained $14.74 Wednesday, or 22.6 percent, closing at $79.89.

Analyst Peter Heckmann, with D.A. Davidson & Co., called the report credible but acknowledged he had not been able to contact either company.

“Acquisitions have been a key part of SS&C’s growth story and DST, with roughly 80% of revenue stemming from investment fund data processing and fund administration, would seem to be a good fit,” Heckmann wrote in a note to clients.

His report also said a deal could lead to “significant cost synergies,” which typically include layoffs. It also could mean a sale of businesses outside DST’s core data processing field, Heckmann said, such as DST Health Solutions and DST’s real estate holdings that include some Kansas City area properties.

DST Systems had sold its printing and mailing business in Kansas City in 2016.

This story was originally published January 10, 2018 at 2:07 PM with the headline "KC-based DST Systems may be sold; stock soars after temporary trading halt."