Shares in Misys rose nearly 9 per cent on Tuesday after the company confirmed it had received a preliminary bid approach, giving it a market value of £1.4bn.
A deal would follow the $1.3bn sale of Misys’s Allscripts healthcare business last year, and complete a five-year turnround of the business by Mike Lawrie, chief executive.
Misys, a software provider for banks, said the approach “may or may not lead to an offer being made”. It did not identify the potential bidder but a deal could be struck within a month, according to people familiar with the situation.
Analysts speculated that the most probable bidder was a US group, with Sungard, FIS Global and Fiserv all potential candidates. Indian IT services companies such as Infosys and HCL are also possibilities, according to Milan Radia, software analyst at Jefferies. Analysts said the Switzerland-based Temenos, Misys’ closest rival in the banking software sector, might also be interested.
Analysts said an offer for the company could reach 500p a share, implying a £1.8bn value. At more than 20 times next year’s expected earnings, this makes Misys more expensive than peers such as Temenos, at 16 times forecast earnings.
Mr Radia said Misys would be a good fit with Indian IT companies who already provide software for banks and are keen to expand in Western markets.
Mr Lawrie took over as chief executive of Misys in 2006 at the request of ValueAct Capital, the company’s biggest shareholder, to turn round a company in disarray following the ousting of its founder and chief executive Kevin Lomax.
Mr Lawrie has returned around $1bn in cash to shareholders following the Allscripts deal, which left the company with no net debt.
The company’s core banking unit which has an 1,200-strong customer base but which growing slowly and is undergoing a painful transition to a more up-to-date software system.
Misys also has a highly respected business providing software for treasury and capital markets software for banks, which is growing much faster, at around 11 per cent, and is the market leader with 30 per cent share.
A bidder is stalking Misys, the software provider for banks that has long been the subject of takeover speculation.
Shares in the company closed up 8.9 per cent at 418.9p. The stock has gained about 30 per cent in the past year.