Reuters: Deals: ValueAct withdrawal clears way for Vista-Misys deal

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ValueAct withdrawal clears way for Vista-Misys deal Apr 2nd 2012, 10:05 By Paul Sandle LONDON | Mon Apr 2, 2012 6:05am EDT LONDON (Reuters) - Misys' (MSY.L) shareholder ValueAct said it would not bid for the banking software group, leaving a $2 billion recommended offer from private equity group Vista as the only bid on the table following a three-way battle for the British company. ValueAct had teamed up with CVC Capital Partners to examine buying Misys after the group started merger talks with its Swiss rival Temenos (TEMN.S) in February, triggering interest from Vista equity Partners. Misys and Vista agreed a 350 pence-a-share cash offer last month, which ValueAct, the owner of 21.5 percent of Misys' equity, did not back, saying it was still considering a joint bid of its own. CVC and ValueAct said on Monday, the date of a put-up-or-shut-up deadline imposed by Britain's Takeover Panel, that they had "no intention to make an offer for Misys". Shares in Misys, which had been trading above 350 pence, retreated 2.7 percent to 348.5 pence as hopes for a bid battle receded. Analysts had already questioned the seriousness of ValueAct's interest, particularly after the departure in early February of Misys Chief Executive Mike Lawrie, whom it had backed. Bob Liao at Canaccord Genuity said ValueAct was almost forced to consider joining the fray after other bids emerged. "I'm not sure if it was as genuine as you may expect considering they were already a shareholder in the business," he said. "At the same time, I think the 350 pence price is not an inflated one, I think it's fair." George O'Connor at Panmure Gordon said the road was now clear for Vista's offer. "Uberbulls might well talk up the (outside) chance of some trade buyer creeping out of the woodwork - but we do not see it," he said. Temenos, which was proposing an all-share merger, retains the right to come back with a competing offer. The talks with Temenos, which was proposing an all-share merger, collapsed after the Swiss company was unable to pin Misys down to a deal, but it retains the right to come back with a competing offer. MANAGEMENT VACUUM Misys supplies software to more than 1,200 companies, and its applications process transactions for many of the world's banks. Its customers, however, under pressure to cut costs in the tough economic environment in Europe, have been delaying major system upgrades. The uncertainty surrounding its future has also hit sales and led to the company issuing a profit warning last month, increasing the pressure on it to find a deal. Analysts have said the group, which also makes software for treasury and capital market customers, has been up for sale at least since last summer, when takeover talks with U.S. company Fidelity National Information Systems (FIS.N) collapsed. "If (Misys) do not do something this time it's a lot more problematic because Mike Lawrie is no longer around," Liao said. "They need to fill a vacuum there as well, and if they don't then the shares are going to drop very dramatically." Vista plans to combine Misys with Kondor, the trade and risk management software firm it bought last year from Thomson Reuters (TRI.TO). Its bid is backed by the holders of about 22 percent of Misys' equity, including Schroder and Threadneedle. (Editing by Jon Loades-Carter) Link this Share this Digg this Email Reprints

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