Misys leaves door open for rival offer

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The UK software developer Misys has left the door open for a rival to start a bidding war despite inviting its management to make a £1bn-plus offer for the business.

An independent committee, headed by Misys' non-executive chairman, Sir Dominic Cadbury, authorised managers yesterday to make an offer. But importantly, the company has allowed the management to explore an offer on a "non-exclusive basis". That leaves the door open for other interested parties to explore a bid.

The committee said no price had been discussed "in relation to all or part of Misys". That suggests there is potential to break up the company and sell it off to different parties. The committee also said it was "considering the best way of maximising value for all shareholders". It stressed that no offer had yet been received and no price discussed.

It emerged last week Misys was considering a potential management buyout with Kevin Lomax, the chief executive, thought to be behind the move to take it private. The private equity companies General Atlantic Partners and Permira are thought to be backing management with rumours that a bid would be pitched at 245p a share.

Analysts have said the company would be worth more if it was broken up and sold to rivals. There is little synergy across its core businesses - banking software and US healthcare systems. It also operates a network for independent financial advisers.

There will be no shortage of buyers for the core businesses after recent consolidation in both sectors. In financial services software, SunGard was bought by private equity companies for $11.4bn (£6.2bn) last year - the largest ever technology privatisation - while the software giant Oracle purchased a 50 per cent stake in iFlex.

Misys shares shed 1.4 per cent to 210.25p yesterday, well short of Arden Partners' sum-of-the-parts valuation of 270p a share.