Swiss banking software firm Temenos walks away from £2 bn merger with Misys

Swiss software firm Temenos yesterday walked away from a potential £2-billion all-share merger with rival Misys, leaving two private equity firms to battle it out for control of the British banking software company.

London-based Misys today said, "Despite extensive discussions, the parties were unable to agree final terms of a transaction." It added that it will pursue a possible cash deal with Vista Equity Partners or a rival private equity consortium of CVC Capital Partners and ValueAct Capital.

Geneva-based Temenos first ignited the takeover battle on 3 February, when it started talks with Misys on a £2-billion all-stock merger in order to create the largest vendor of banking software.

The deal had the backing of Misys largest shareholder, US-based ValueAct Capital, which holds 21.5 per cent stake.

In late February, San Francisco-based Vista Equity Partners launched a rival £1.2-billion bid, torpedoing the near agreed merger between Misys and Temenos. Vista's bid values Misys at about £1.2 billion, higher than the Temenos merger proposal, which valued the Misys at about £918 million.

Early this month, ValueAct suddenly changed tracks and teamed up with CVC Capital Partners to reveal that they were in talks about a cash bid.