Misys valued at £1.4bn as approach confirmed

Misys, a leading supplier of software to the banking industry, saw its market value soar to near £1.5 billion yesterday after it revealed a takeover approach.

The disclosure from company, which has offices in London and Worcester and employs 4,000 worldwide, ends weeks of speculation that the group was a bid target.

Shares in the group jumped to a new ten-year high of 420p, valuing the group at more than 1.4bn. They closed at 418.9p.

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Misys gave no indication over who the bidder might be, but in recent weeks market talk has mentioned US firms Sungard and FIS Global as possible bidders.

The company has more than 1,200 bank customers and is also a major supplier of back office and trading systems to fund managers and traders.

It has seen its value rise sharply over the past three years following the sale of its majority holding in the AllScripts US healthcare business last year, which resulted in a cash return of nearly 700 million to Misys shareholders.

Misys shares have risen from 310p in March as takeover talk has persisted.

Analysts suggested a bid for the firm seemed inevitable given the group's strong market positions in software banking and treasury and capital markets and improved financial position following the recent restructuring carried out by chief executive Mike Lawrie, which included the Allscripts disposal.

Milan Radia, a broker at Jeffries, said Misys would appeal to a number of potential bidders in the US or to Indian firms, such as Tata Consultancy or Infosys, looking to build an international presence. He added that while Misys was well positioned to carry on with its two core divisions "it could deliver more value to a potential bidder".

Tom Gidley-Kitchin, analyst at Charles Stanley, said: "Our unchanged view is that a deal will be done, and it will be at a good price likely to be at 450p or conceivably higher."

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