The number of takeover bidders circling the banking software company Misys was cut from three yesterday after its listed Swiss rival Temenos pulled out of the running.
Temenos sparked the takeover frenzy on 3 February when it opened negotiations with Misys about a £2bn merger.
Since then, two other private-equity bidders, Vista Equity Partners and a joint pairing of CVC Capital and Value Act Capital Partners, have emerged. The Swiss company said it ended talks because "no agreement has been reached on the final terms of a transaction".
"We are not surprised that Temenos has walked away," said George O'Connor, an analyst at Panmure Gordon, noting that the Swiss company was not offering a cash "sweetener" and that the merger also faced a number of operational challenges.
Mr O'Connor added that Vista looked to be in pole position to buy Misys, but warned that private equity has something of a habit of pulling out of such battles.
The broker cut its target price as Temenos' withdrawal meant there is a "lack of a takeover premium".
There is further uncertainty about the future of Misys as chief executive Mike Lawrie (pictured) said last month he would step down. Shares in Misys fell 13p to 328p, valuing it at £1.1bn. Under Takeover Panel rules, Temenos now only has the right to make a fresh offer within six months if Misys agrees a sale to a third party.