Reuters: Global Markets: Misys agrees $2 billion takeover by Vista

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Misys agrees $2 billion takeover by Vista Mar 19th 2012, 11:39 By Paul Sandle LONDON | Mon Mar 19, 2012 7:39am EDT LONDON (Reuters) - British banking software company Misys (MSY.L) has agreed to be bought by private equity firm Vista Partners for 1.27 billion pounds ($2 billion) after dismissing a merger with a rival and in the absence of a competing bid from its top shareholder. Misys said on Monday it was backing a 350-pence-a-share cash offer from Vista, which will combine Misys with Kondor, the trade and risk management software firm it bought last year from Thomson Reuters (TRI.TO). ValueAct, which holds a 21.5 percent stake in Misys and has teamed up with private equity group CVC Capital Partners to consider a bid of its own, did not endorse the deal. Shares in Misys were up 6.8 pence to 351.8 pence by 0955 GMT, signaling investors are hopeful of a higher offer. ValueAct and CVC declined to comment, as did Swiss software group Temenos (TEMN.S), which could also come back in after pulling out of talks earlier this month. Misys and Temenos are enduring tough trading as their core bank customers, under pressure to cut costs, delay spending on major system upgrades. Alongside news of the deal, Misys issued a profit warning, saying revenue plunged 12 percent in its fiscal third quarter, resulting in a 3 percent drop for the year to date. Analyst Roger Phillips at Merchant Securities said that, in light of the profit warning, the Vista deal looked good. "In case any shareholders were thinking about not accepting, the Misys third-quarter (trading update) out today contains a very material profit warning," he said. "In part this is down to deal-related delays in license fee signatures but it also suggest Misys would face a rocky future on a standalone basis as trading conditions worsen." Misys's acting chief executive Tom Kilroy dampened hopes of a counterbid. HARD TO BEAT? "If any other company made an offer we would of course talk to them, but we think it is unlikely this deal will be bettered," he said. Kilroy said uncertainty about the company's future had contributed to the profit warning and was confident many orders had been postponed rather than canceled. Merchant Securities' Phillips said that, given Misys' "moribund organic performance over the last five years," Vista could only justify the price on the basis of merger synergies with Kondor. Misys has been up for sale since last summer, analysts have said, when takeover talks with Fidelity National Information Services (FIS.N) failed. The U.S. group was reportedly considering a 400 pence a share deal. Last month Misys agreed to merge with Temenos in a cost-cutting all-share merger. The tie-up received a poor reception from some Misys shareholders, and the Swiss company walked away after it failed to firm up a deal. Misys said the holders of about 22 percent of its shares had so far backed the Vista offer. ($1 = 0.6312 British pounds) (Editing by Mark Potter) Link this Share this Digg this Email Reprints

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