Vista's bid reportedly values Misys at about £1.2bn, far higher than the Temenos merger proposals, which valued the company at about £918m
Swiss banking software company Temenos has pulled out of its near £1bn bid for British rival Misys.
The decision comes after two other parties entered a bidding war for the FTSE 250 company. ValueAct, the US activist investor which owns 21% of Misys and had encouraged Temenos to make its bid, has teamed up with private equity firm CVC Capital Partners. The pair and rival Vista Equity Partners are both in discussions with Misys's board about a possible cash offer.
Vista's bid reportedly values Misys at about £1.2bn, far higher than the Temenos merger proposals, which valued the company at about £918m. The size of CVC's potential bid has not been disclosed.
"Despite extensive discussions, the parties were unable to agree final terms of a transaction," Misys said in a statement. "Misys continues to be in discussions with Vista Equity Partners... and CVC Capital Partners."
Julian Yates, an analyst at Investec, said: "We see this as a positive as we foresaw material integration risk [between Temenos and Misys]." He raised his rating on Misys from "hold" to "buy".
ValueAct followed its former partner Mike Lawrie into Misys after he became chief executive at the British group in 2006, and could now remain involved long after his departure. Lawrie is due to return to the US to join IT services company CSC at the end of March.
This month ValueAct chief executive Jeffrey Ubben, who sits on the Misys board, said: "We are pleased to have teamed up with CVC to work on a potential joint offer. The proposed Misys and Temenos all-share merger has strategic logic but after further consideration we have decided to evaluate whether we can make an alternative proposal that provides the certainty of cash upon completion."
CVC and ValueAct have until 2 April to table a firm bid, while Vista has until 19 March, according to Takeover Panel rules.