The acquisition discussions between Misys and Fidelity National Information Services (FIS) have come to a halt with Misys apparently being too rich a meal for FIS to consume.
Last month FIS approached Misys with a non-binding indicative cash offer for Misys (see Fidelity National Information Services makes approach to Misys), kicking of a round of discussions. A revised offer was made last week which Misys roundly rejected on the grounds that it “materially undervalues” the company, and decided to withdraw from discussions with FIS. Misys put out a good set of FY results last week (see Misys looks good but Fidelity offer adds a note of uncertainty) that showed its banking division delivering “significant revenues for the first time”.
FIS’s comment on the situation is that it is no longer considering making an offer for Misys although it is not ruling everything out. In a statement FIS said it “reserves the right to announce an offer or possible offer or make or participate in an offer or possible offer for Misys which would otherwise be restricted under Rule 2.8 of the Code within the next six months, in the event that an agreement or recommendation from the board of Misys is forthcoming.”
Given the emphatic rejection by Misys, the odds on it approaching FIS are low. Having bet the business on banking and now seeing glimmerings of the payback it is feeling confident, although despite its positive results it did not raise it medium-term revenue growth targets. Its multi-year transition programme is still ongoing.