Banking software firm Misys has confirmed in a short statement that it is in preliminary discussions with Swiss rival Temenos about a possible all share merger, worth the equivalent of US$2 billion. The announcement follows speculation that Misys would look for a partner after a proposed deal with Fidelity National Information Services (FIS) collapsed in August 2011, the latest in a long line of failed takeovers of the UK headquartered firm.
"Discussions are continuing and there can be no certainty that a transaction will ultimately take place, nor as to the terms on which any transaction might be constituted," read the Misys online statement. The company did not respond to a request to confirm or deny speculation that the link- up was already a ‘done deal’.
A statement by Temenos in response to claims in the Saturday Guardian and other newspapers over the weekend that the deal has been concluded bar the signing, read: "Temenos notes the announcement made by Misys and confirms that it is constantly evaluating its strategic options. Such processes currently include a possible strategic combination with Misys to be effected by way of an all share merger. Discussions are at an early stage and no decisions have been taken."
Market reaction has been sceptical to the prospect of a US$2bn deal between Misys and Temenos, suggesting a tie-up could be a quick fix to tackle weak demand rather than making long-term strategic sense. Both vendors specialise in the core banking software market so there are obvious synergies in any tie-up and Misys’ treasury and capital markets business could also be attractive to Temenos, furthering its reach in these areas.
By Neil Ainger
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