Misys Plc, the financial-software maker that agreed to merge with Swiss competitor Temenos Group AG, rose as much as 12 percent in London trading after drawing a rival bid from Vista Equity Partners.
Misys received a non-binding proposal from Vista to acquire all outstanding shares in cash, the company said in a statement today. Misys, based in London, had attracted interest from buyout firms and would consider alternatives to the Temenos deal, two people familiar with the matter said on Feb. 14.
A Vista bid would threaten Misys's tie-up with Geneva-based Temenos, a deal set to create the largest vendor of banking software in the world. Misys agreed to the transaction this month, which would give its shareholders about 54 percent of the combined company. Vista may put forward an indicative 1.2 billion-pound ($1.9 billion) bid, or 360 pence a share, the Financial Times reported today, citing people close to the deal.
"If I were a Misys shareholder, they're on balance going to savor a knock out cash bid," said Milan Radia, an analyst at Jefferies International Ltd., in London. "If you're getting close to 4 pounds despite the market getting worse then that probably does the job."
Vista, based in San Francisco, said in a separate statement today that a potential offer will depend on the completion of due diligence and a recommendation from Misys' board of directors.
Misys rose 20.5 pence, or 6.6 percent, to 330.1 pence in London. Temenos dropped 0.3 percent to 17.9 Swiss francs on the Zurich exchange.
A spokeswoman for Temenos declined to comment. Vista has until March 19 to declare interest in Misys, according to today's statement.
Companies that sell financial software for businesses are proving attractive to private-equity firms as mounting banking regulations increase demand for up-to-date systems. In August Bain Capital agreed to buy a majority stake in MYOB Pty Ltd., an Australian provider of business software that had also attracted a bid from Sage Group Plc.
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, previously indicated its "strong support" for the merger, Misys said Feb. 8.
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 in the half year ended Nov. 30.
Under the terms of the Temenos merger, the Swiss company's shareholders would receive 4.1 Misys shares for every Temenos share they hold.
Six months ago, Misys's talks to sell itself to Fidelity National Information Services Inc. collapsed after the two failed to agree on price, a person with knowledge of the matter said then.
U.K. deals tend not to include breakup fees, typically included in U.S. transactions, meaning a company that terminates a deal to pursue a more convenient opportunity doesn't necessarily incur extra costs.