After the collapse of the agreed all-share merger with Temenos, Misys has now agreed a £1.27 billion cash deal with Vista Equity Partners, spurning a rival bid from ValueAct which was acting in conjunction with its own private equity partner CVC.
Misys is recommending the offer from Vista, priced at 350 pence a share, to its shareholders, and more than 20% of investors have already come out and backed the offer, which values the company at considerably more than Temenos was initially offering for the core banking solution provider, although interestingly not more than the late entrant to the bidding war, ValueAct.
The reason for this is probably because Misys sees better synergies with its recommended tie-up. Vista plans to merge Misys with Turaz, the rebadged trade and risk management technology business it bought from Thomson Reuters last month, so the ‘fit’ between the two companies is more natural and harmonious.
Of course, ValueAct and CVC may yet return with an enhanced cash bid to try to woo the remaining Misys shareholders. Both partners said in a statement that they, “continue to consider their options in respect of Misys, including a possible recommended joint cash offer for the company and urge Misys shareholders to take no action at this time."
Regardless of the threat of another agreed takeover falling through Tom Kilroy, acting chief executive of Misys said he was: "… looking forward to combining our core banking solutions and our capital markets solutions with the trading and enterprise risk management solutions from Turaz. The combined company will be the global leader in delivering solutions to the financial services industry and will have over 1,700 global customers."
Kilroy is no doubt mindful of the impact that the continuing uncertainty over Misys’ ownership is having upon the company, with its just released Q3 interim management statement, showing that revenues are down 12% at the vendor and order intake down 18%. “We are confident that sales are being delayed rather than cancelled,” he explained when discussing the uncertainty created by the takeover battle for Misys.
By Neil Ainger