British authorities treat deal between Misys and Temenos as a takeover by Swiss

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T24 News
The impending £2bn deal between bank software providers Misys and Temenos is being treated by British authorities as a takeover by the Swiss-listed group
The so-called merger of equals between British software firm Misys and its Geneva-based rival had been billed as a simple and even-handed joining of the two.

But the deal is increasingly looking more like a foreign takeover by the smaller Swiss player.

The headquarters of the resulting company will move to Geneva, and its annual shareholder meetings will also be held in the city – more than 600 miles away from London, where Misys investors are used to gathering.

The group is expected to take advantage of the Swiss tax regime, a move that could end up costing the British Treasury the £11.5m of tax Misys paid in the last financial year.

 

City merger watchdog the Takeover Panel is also treating the substance of the deal as a takeover, the Daily Mail can reveal

The resulting firm, whether or not it is still called Temenos, will have a market value approaching £2bn – a level that could one day put it in a position to enter the FTSE 100 index.

On the day talks between the two were announced, Misys’ market valuation was £1.1bn, higher than the £852m valuation of Temenos.

But earlier this week it emerged that the combination of the firms would see the current chief executive and chairman of Temenos moved straight across to the same jobs in the new group.

Misys will get to nominate five of the nine members of the company’s board, and will keep chief finance officer Stephen Wilson in his role.

But Misys chief executive Mike Lawrie will walk away from the company with a £1.7m golden goodbye to join American IT group Computer Services Corporation, relinquishing the helm of the merged group to Guy Dubois.

Sir James Crosby, the former HBOS boss who chairs Misys, will also leave, but with no severance pay beyond his £180,000 basic salary. Temenos chairman Andreas Andreades will retain his role in the new firm.

Investors in Misys will own 53.9 per cent of the shares in the new company, with Temenos shareholders owning 46.1 per cent. The stock will list in London.

Temenos’ flagship software T24 is regarded as more likely than Misys’ equivalent BankFusion to be selected as the combined firm’s flagship product.

Yesterday it emerged the group would offer both products to customers, even though T24 is already the market leader.

Temenos declined to comment.