Misys and Temenos £2bn merger collapses

All-cash offers from private equity firms led to collapse, says TechMarketView

The £2bn all-share merger between banking systems specialist Temenos and banking software provider Misys has collapsed.

In February, the companies announced that they had agreed terms on a possible merger that would create one of the world's largest financial software companies, with the CEO of Temenos, Guy Dubois, lined up to be the CEO of the combined group.

Just a month after the initial announcement, Temenos has released a statement to confirm that the deal has collapsed.

"Temenos today announces that no agreement has been reached on the final terms of a transaction. Accordingly, Temenos confirms that discussions between the two parties have now been terminated," read the statement.

According to analyst firm TechMarketView, the nil-premium deal that would have seen investors get shares rather than a cash hand-out had not been popular among shareholders.

The analyst firm said that the merger became unlikely after private equity firms that were willing to give cash hand-outs began chasing after Misys.

"The odds of the share-based Misys and Temenos proposal going ahead had lengthened considerably in the face of two prospective private equity all-cash offers," said Angela Eager, research director at TechMarketView.

In a statement, Misys confirmed that both parties were unable to agree final terms of a transaction and said that although it was still in discussions with two private equity firms, there was no certainty that any offer will be made.

"Misys continues to be in discussions with Vista Equity Partners, as set out in the announcement dated 20 February 2012, and CVC Capital Partners Limited and ValueAct Capital (as joint offeror), as set out in the announcement dated 5 March 2012, in both cases regarding a possible cash offer for the company.

"There can be no certainty that any offer will ultimately be made nor as to its terms," it said.

Temenos said that it has the right to make another offer if a third party emerges with an offer for Misys.