Misys Plc’s agreement to be acquired at Europe’s cheapest valuation for a software takeover is leaving the door open for rival bidders.
Vista Equity Partners said this week it will purchase Misys for 1.3 billion pounds ($2.1 billion), valuing the British financial software maker at 13 times earnings before interest, taxes, depreciation and amortization. That’s the least expensive on record for a software takeover in Europe greater than $1 billion, according to data compiled by Bloomberg. At 21 percent more than Misys’ 20-day trading average before merger talks with Temenos Group AG were disclosed last month, Vista’s bid is also half the industry’s average premium, the data show.
“It is trading through the terms because there is still another potential bidder out there and there is a little bit of room in an LBO model for a higher price,” Christie Groves, a London-based analyst at Churchill Capital UK Ltd., said in a phone interview. “I would maybe put a 20 percent chance of a higher bid.”
Misys traded as high as 430 pence in 2011 before ending the year at about 232 pence after Jacksonville, Florida-based Fidelity National Information Services Inc. broke off talks in August to acquire the company. The two failed to agree on price, a person familiar with the matter said at the time.