With Misys confirming that it has received a preliminary approach regarding a potential bid for the company, the question is: who is the interested party?
Having sold off its joint venture Allscripts healthcare business Misys is firmly back in the financial software world with its attention focused on its Treasury and Capital Markets and banking divisions, where both areas are picking up (Misys momentum picks up in Q3). Emerging new business and a high quality installed base that includes many top banks, combined with a business environment in which Misys is striving to prevent defections, makes in an attractive proposition for a number of companies.
Interest could be coming from a range of competitors including Temenos, Fidelity National Information Services, Fiserv, SunGard, Infosys (Finacale), TCS (BaNCS), and HCL. Media speculation is that the interested party could be a US listed market player, or one of the Indian participants. Even SAP and Oracle could be considered as interested parties due to their growing focus on banking. While Oracle has bought into the market, SAP is still looking for a boost. However, both of these companies should be considered outsiders in the Misys case.
Rumors of an potential bid have moved the Misys share price upwards over recent weeks and news of the approach added a further boost, taking the share price during Tuesday afternoon trading to 417p.
Given the number of potentially interested players, other potential bids should not be ruled out and a bidding war could ensue. The other question is whether Misys would sell the company as a whole of just one part of the operation. The banking operation – and Mysis’ new BankFusion platform - could be an attractive proposition given that there is evidence of the company making progress here. As of the Q3 interims in April this year, it had acquired 19 new BankFusion customers. The banking sector as a whole is expected to invest heavily in new core banking platforms. Misys offers a solid existing customer base ripe for upgrades.