Misys now has a third suitor keen to take the banking systems provider into its fold. Private equity firms CVC Capital Partners and ValueAct Capital Master Fund are working on a joint proposal. There is no offer as yet but if something does materialise it will be a cash offer. The duo has until April 2 to determine whether to go ahead or not.
So now we have Temenos with its firm share-based offer, Vista Equity Partners in discussions with a cash offer believed to be in the region of £1.2bn (see Misys/Temenos halted by Vista Equity Partners?), and CVC Capital/ValueAct also talking about a potential cash offer. The Temenos deal is looking progressively weaker in the face of two prospective cash offers. With two private equity firms in play a bidding war is in place (and putting broad smiles on the faces of Misys investors). The latest news certainly slashes the already outside odds of former suitor Fidelity National Information Services coming back with another offer as it would be unlikely to want to match anything the PE’s could come up with.
It’s easy to see why the new combo is interested in Misys. ValueAct got to know Lawrie during his (short) time at the helm of Siebel prior to its acquisition by Oracle. Value Act also had an investment in Siebel. After leaving Siebel Lawrie joined ValueAct. The PE firm knows Lawrie’s style and presumably believes he will have left Misys in a position that would enable CVC Capital/ValueAct to do something with it. CVC Capital has a broad 60-strong portfolio with a smattering of UK financial services interests.
It should be remembered that there is only one firm offer on the table, and everything else is only ‘prospective’. However, given the level of interest and Misys’s changed situation (see Misys acts to cut costs as market deteriorates), the chances of one of these potentials ending in a firm deal is high and we suspect cash will be king.