Temenos pulls out of Misys merger talks
By Martin de Sa'Pinto and Paul Sandle
ZURICH/LONDON (Reuters) - British software firm Misys MSY.L said it was continuing to pursue takeover approaches from two private equity groups after Swiss rival Temenos (TEMN.S: Quote) pulled out of merger talks, saying it could not pin Misys down to a deal.
Only last week, Temenos won more time to prepare its all-share merger proposal for banking software specialist Misys, after Britain's Takeover Panel extended a deadline by four weeks.
Temenos said on Monday talks had ended because the two companies could not reach an agreement, but it could still come back to the table if another bidder made a firm offer.
Misys said it was still pursuing a possible cash deal with Vista Equity Partners or a rival private equity combination of CVC Capital Partners and ValueAct Capital.
A source close to the talks said Temenos still believed it made sense for the two groups to combine - both of them are suffering from weak demand from the banking sector - but that the Swiss group had run of patience.
"Although Temenos believes there is major upside from a combination, it is very disciplined in how it evaluates opportunities and could not agree satisfactory terms in a reasonable timescale," the source said.
Shares in Misys fell 2.1 percent to 333.9 pence by 0925 GMT, while Temenos was down 4 percent to 15.55 francs, making it the worst performer in a flat Swiss midcap index .SMIM.
Analyst George O'Connor at Panmure Gordon said he was not surprised Temenos had walked away. Continued...