AN ANIMATED market reaction yesterday sent Misys’ shares above the bid price from Vista Equity Partners, which yesterday offered Misys a £1.27bn route to salvation one week after Temenos walked away from a merger deal with the banking software firm.
Vista, a US-based private equity firm, said it was prepared to lay out 350p per share, offering a rate 32.1 per cent above Misys’ three-month average closing price before discussions with Temenos were announced, and a premium of 6.2 per cent on Friday’s closing price of 330p.
But eager investors sent the share price climbing 7.4 per cent to 354p.
With the exception of non-executive director Jeffrey Ubben, who abstained due to his role as chief executive of potential rival bidder ValueAct, Misys’ independent directors offered unanimous support for Vista’s bid.
The private equity firm, acting through investment vehicle Magic Bidco, said it had garnered irrevocable undertakings of 21.9 per cent, including the approval of Schroder and Threadneedle, Misys’ two biggest shareholders behind ValueAct.
But ValueAct, which said on 5 March it was contemplating a cash bid alongside CVC, urged Misys’ shareholders to take no action and said it continued to consider making a move.
Vista’s proposal will see Misys combined with Turaz, the trade and risk management software company it acquired in January from Thomson Reuters, to create “the global leader in delivering solutions to the financial services industry”, said Misys acting chief executive Tom Kilroy.
Merchant Securities analyst Roger Phillips told City A.M. the prospect of a merger with Turaz is solid justification for the bid price.
Vista has over $6bn under management and focuses on acquiring enterprise application software companies. To date the firm has completed 68 software-related transactions worth almost $15bn.
Vista’s offer came as Misys released its third quarter trading update which revealed revenue was down 12 per cent on an 18 per cent drop in order intake – a lag the company put down to customers delaying rather than cancelling their decisions due to the turbulence of the recent bidding war.