Misys Accepts $2B Bid, But Some Investors Hope For More

U.K. banking-software provider Misys PLC (London: MSY) on Monday said it accepted a £1.27 billion ($2 billion) cash bid from Vista Equity Partners, a private-equity firm focused on technology companies.

Some investors in Misys, however, are hoping for a better offer.

The offer from San Francisco-based Vista would give investors 350 pence per share, a 32 percent premium to Misys's average closing price during the three months leading to Feb. 2. That was the last trading day before the disclosure of talks between Misys and Swiss rival Temenos Group AG (Zurich: TEMN); those discussions fell apart last week.

The 350 pence-a-share offer is a 6 percent premium to Misys's closing price Friday.

In Monday afternoon trading in London, the shares rose as high as 357 pence, or 8.4 percent, suggesting many investors anticipate a better offer.

Although Misys's independent directors considered the offer from Vista fair, holders of only 22 percent of the shares had backed the deal as of Monday afternoon, Reuters reported.

Hedge fund firm ValueAct Capital, the biggest shareholder of Misys with over 21 percent, didn't endorse the deal. The firm is currently working with CVC Capital Partners, a private-equity group, to discuss a possible cash bid of their own for the software company.

Temenos, too, could still rejoin the bid after pulling out last week, according to Reuters.

But Tom Kilroy, acting chief executive of Misys, said he doubts a more favorable offer will materialize.

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 told the Financial Times.

Along with its announcement of the Vista bid, Misys noted that third-quarter revenue was down 12 percent from a year ago, a sobering indication that investors might want to give Vista's offer serious consideration, analysts said.

Today's announcement came with a disappointing third-quarter trading update, reminding investors that conditions in the group's markets remain tough. ... We believe investors are likely to be more predisposed to accept the offer on the table, Tintin Stormont of Singer Capital Markets was quoted as saying by Britain's Guardian newspaper.

Vista plans to merge Misys with Kondor, a provider of risk-management software that it bought last year from Thomson Reuters, to achieve lower costs and leverage each other's customer bases, U.K. newspaper the Telegraph reported.

Misys, one analyst argued, could have benefited more from a deal with Temenos. Andreas Mueller, of Switzerland's Zuercher Kantonalbank, told Bloomberg News. This will probably be it for Temenos in this deal, I don't think they'll come back again. The synergies would have been higher from a combination with Temenos, he said.