Misys warns on profits as successor to Lomax lined up

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The Independent Online

Misys, the troubled software developer that pulled out of takeover negotiations last week, is on the verge of appointing a new chief executive after Kevin Lomax officially resigned from the post following his failed bid to take the company private.

Misys also revealed that trading at its US healthcare business has been weak during the first quarter. The company's share price crashed 18 per cent to 185p on the news, below the level before the bid talks started.

Mr Lomax has stepped down from the company he founded with immediate effect and will be eligible for a pay-off of more than £1m. The chief executive, who owns about 1.1 per cent of the company's shares, has previously faced down shareholder criticism for jointly holding the chief executive and chairman's roles and for an executive bonus scheme. He also instigated a boardroom spat at retailer Marks & Spencer where he forced out the chairman, Paul Myners.

Misys revealed that during the bid process it has also been interviewing candidates for Mr Lomax's job, and has a shortlist of external contenders. The company expects to make an appointment by the middle of this month.

Misys holds its annual meeting tomorrow and is likely to come under pressure to detail plans to split up the conglomerate software company's assets.

However, until a new chief executive is named, Misys is unlikely to detail any plans to restructure its operations.

Adding to the uncertainty was a bleak outlook. Misys expects adjusted earnings per share to be lower than the 14.2p it recorded last year as a result of factors such as currency exchange rates, asset sales, higher US interest rates and lower order intake at the company's US healthcare business.

Misys has been talking to various parties since Mr Lomax first approached the company in June about a management buyout backed by the private equity companies Permira and General Atlantic.