Misys-Temenos mega merger attracts rival bidders

Misys could yet be acquired by a private equity firm, despite last week announcing talks regarding a possible £2 billion merger with Temenos to create a banking software giant.

Unnamed rivate equity suitors are circling the firm, according to a report in Businessweek.

UK-based Misys and Swiss firm Temenos plan to form one of the largest specialist financial software organisations in the world with their merger. A deadline of 6 March was set to allow other parties to come forward in any alternative deal involving Misys.

The report in Businessweek says Misys "has attracted interest from buyout firms and would consider alternatives to that deal if they're deemed better for shareholders, two people familiar with the matter said".

Misys has not, however, solicited offers from potential acquirers, said sources for the report, who declined to be identified.

Misys' share price has risen substantially in response to the reports, in spite of a slight dip today. It was also boosted following ~Misys' initial statement that it was in talks with Temenos.

The existing Misys deal has attracted some speculation about the prospects of UK jobs, after Swiss-based Temenos said the headquarters of the combined firm will be located in Switzerland and headed by its current CEO.

UK headquartered Misys employs a global workforce of 4,000 and has been looking for a potential buyer for some time. Last year there was an aborted takeover by US firm Fidelity National Information Services (FIS), after Misys said the bid undervalued the company following a year when profits rose by 12 percent.

Confirmation of the merger talks came after IT services firm CSC announced that Misys CEO Mike Lawrie will become CEO of CSC by the end of March. He has already taken a seat on CSC's board.

Jost Hopperman, vice president at analyst house Forrester, said that a Misys-Temenos merger, if it goes ahead, "has the ingredients to become one of the most significant mergers in the banking industry in the past few years".

A merger would created a "broader and deeper portfolio" of software, and a "truly large" supplier to banks, said Hopperman. But he added that there were significant risks, including possible overlap in the two product portfolios, a need to establish a proper integrated set of applications, different corporate cultures between the companies, and how customers percieve the move.

Copyright © 2012 IDG Communications, Inc.

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