Misys plc and Temenos Group AG discussions regarding a possible all share merger

First Published 9th February 2012

Misys plc and Temenos Group AG discussions regarding a possible all share merger

Further to the announcements made on 3 February 2012, Temenos and Misys have confirmed that they have reached agreement in principle on certain key terms and are in continuing discussions regarding a possible all share merger of the two groups.

Misys and Temenos believe that the combination would create one of the leading companies in the financial services software industry with the prospects for long term growth underpinned by increasing demand amongst financial institutions for improved efficiency and customer service.
The combined business is expected to benefit from enhanced scale and growth prospects, supported by a global, blue-chip customer base. Temenos and Misys believe that Temenos' presence in banking, wealth management and business-intelligence complements Misys' presence in core and transaction banking, treasury capital markets and lending.

It is expected that the combination will yield significant cost savings and operational synergies through scale efficiencies and cross-selling opportunities.

Following completion of such merger it is intended that Misys shareholders will own approximately 53.9 per cent of the issued share capital of the combined group and Temenos shareholders will own approximately 46.1 per cent, after taking into account dilution from options outstanding and excluding the effects of the potential conversion of Misys' Convertible Bond. The exchange ratio will be 4.1 Misys shares to 1 Temenos share.

Guy Dubois, currently CEO of Temenos, will act as CEO of the combined group and Stephen Wilson, currently CFO of Misys, will act as CFO of the combined group. Both Guy and Stephen will become members of the Board of Directors which will be chaired by Andreas Andreades, currently chairman of Temenos. It is envisaged that the Board of the combined group will comprise of 9 individuals in total: 5 nominated by Misys and 4 by Temenos. ValueAct Capital, the largest shareholder in Misys, has indicated its strong support for the proposed merger and will be represented on the Board. Mike Lawrie, CEO of Misys, has informed the Board of Misys that he will be pursuing a new opportunity.

Misys and Temenos currently intend to merge under a new holding company that will seek a premium listing on the London Stock Exchange with a potential secondary listing on SIX Swiss Exchange. The combined group is expected to be headquartered in Switzerland.

The making of any formal announcement will be conditional, inter alia, on completion of satisfactory mutual due diligence and agreement of definitive legal documentation. There can be no certainty that any transaction will ultimately take place nor as to its terms.

In accordance with Rule 2.6(a) of the Code, whichever company is to acquire Misys pursuant to this structure (whether a new holding company to be formed by Misys and Temenos or otherwise) must, by no later than 5.00pm on 6 March 2012, announce a firm intention to make an offer for Misys in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

An announcement in accordance with Rule 2.10 will follow shortly. Further announcements will be made as and when appropriate.

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