Misys sinks as ValueAct and CVC walk away

SHARES in Misys dropped three per cent yesterday when ValueAct and CVC admitted they do not intend to bid for the banking software firm.

The private equity partnership, which had until yesterday to “put up or shut up”, confirmed it would not rival Vista’s £1.27bn offer for Misys.

ValueAct, which holds a 21.5 per cent stake in Misys, and CVC‚ÄąCapital Partners, teamed up to enter a bidding war following a proposed all-share merger from Temenos and the prospect of a cash offer from US-based private equity firm Vista.

Temenos withdrew its merger offer just days before Vista solidified its interest a fortnight ago, offering 350p per share for Misys, or £1.27bn.

The market’s reaction quickly sent the shares above the offer price, hitting a high of 359p and prompting some to speculate that a better offer could yet knock on Misys’ door.

But most analysts said ValueAct, as the biggest shareholder in Misys, had only entered the race to stoke the fire and drive up the company’s price.

With the exception of director Jeffrey Ubben, who is chief executive of ValueAct, the board of Misys backed the Vista deal, which was also supported by Schroders and Threadneedle, two of Misys’s biggest shareholders.

Despite this strong backing, analyst Stefan Gachter, from Zurich-based Helvea, told City A.M.: “It’s not impossible that Temenos could come back – I still think a merger between it and Misys makes sense. It has more value than just a cash offer.” Temenos shares jumped three per cent yesterday.

The Swiss firm walked away from an all-share merger with Misys as the final terms of the deal could not be reached. Shareholders are thought to have been unimpressed by the lack of cash included in the Temenos deal.