Bloomberg News

Misys Holders Win Control in Temenos Merger as Lawrie Goes

February 09, 2012

(Updates with today’s trading in fifth paragraph.)

Feb. 8 (Bloomberg) -- Misys Plc shareholders will gain a majority stake in the company formed by merging the U.K. software maker with Temenos Group AG, while the Swiss rival’s chief executive officer will take the helm.

Misys investors will own 53.9 percent of the enlarged group, to be headquartered in Switzerland, the companies said yesterday. Temenos CEO Guy Dubois will head the new entity and Misys Chief Financial Officer Stephen Wilson will keep his role. Misys CEO Mike Lawrie will step down.

Six months after failing to reach a deal to be acquired by Fidelity National Information Services Inc., London-based Misys linked up with Temenos to create the largest vendor of banking software as many of their customers are under pressure to fire workers and reduce costs. Any final pact is subject to the completion of legal agreements and a financial audit.

“The combined business is expected to benefit from enhanced scale and growth prospects, supported by a global, blue-chip customer base,” the companies said yesterday as they agreed on the key terms of the combination.

Misys fell 4.4 percent to 311.7 pence at 9:13 a.m. in London. Geneva-based Temenos, which rose 16 percent when the talks were announced on Feb. 3, declined 3.6 percent in Zurich trading. The companies had a combined market value of about $3.3 billion, based on yesterday’s closing prices.

ValueAct Support

Misys makes software for cash, wealth and risk management as well as for syndicated lending, over-the-counter derivatives trading and post-trade processing. It has more than 1,300 banking customers. Temenos’s products include software for data management and payments, according to its website.

ValueAct Capital, Misys’s largest shareholder, “indicated its strong support for the proposed merger and will be represented on the board,” the companies said.

The merged company will seek a listing on the London Stock Exchange with a potential secondary listing on the Swiss bourse.

The ownership split takes into account dilution from outstanding stock options and Misys debt that may be converted into shares, according to the statement. The exchange ratio will be 4.1 Misys shares to 1 Temenos share. The board of the new entity will have nine seats, five nominated by Misys and four by Temenos.

Dubois and Wilson will become members of the board of directors which will be headed by Temenos Chairman Andreas Andreades.

Sales at Temenos advanced 16 percent to $225.6 million in the six months ended June 30, while revenue at Misys, boosted by an acquisition, increased 22 percent to 197 million pounds ($312 million) in the half year ended Nov. 30.

Talks between Fidelity and Misys were close to an agreement last year but negotiations were called off after the companies couldn’t agree on a price, a person familiar with the situation said in August.

Lazard & Co. advises Temenos, while Barclays Capital is acting as financial adviser to Misys.

--Editors: Simon Thiel, Kenneth Wong.

To contact the reporters on this story: Amy Thomson in London at athomson6@bloomberg.net; Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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