been an approach, then revealed a few days later that this was from FIS. The latter issued a statement confirming that it had ‘made a preliminary approach regarding a possible cash offer for Misys’. Misys’ stock price on the day jumped over eight per cent, to 417 pence per share, bringing the overall value of the business to £1.4 billion. Phil Branston, director of investor relations at Misys, confirmed to IBS that the approach related to the whole of Misys, rather than to a certain unit. Prior to the FIS episode, speculation about a buyer for


Misys had ranged from Sungard and Fiserv, to Indian rivals such as Infosys and TCS, to offshore developers such as HCL Technologies. A usual suspect in such developments, Temenos, was also expected to be among potential buyers. Analysts at UBS, for example, flagged a possible combination of Temenos and Misys in a report in late 2010, and put both companies on its M&A Watchlist. The research cited Misys as a company with an ‘extensive customer base, but less competitive product set’, referring to its widespread older platforms. Temenos’ share value plummeted 14 per cent on the day FIS went public with its intention to acquire Misys.


During the period in which FIS was a potential buyer, Misys unveiled its results for the year ended 31st May 2011. Speaking at the analyst and investor presentation, Lawrie emphasised that Misys was running ‘business as usual’ and he was ‘very comfortable and confident’ of where the business was at present and where it was going. Unlike rivals such as Temenos, Misys’ revenues were ‘not nearly as dependent on new sales’, he said. ‘We have a very strong recurring revenue stream as we have our services business. We believe that shedding the services business [which Temenos was doing at this time] is a strategic disadvantage. We want to be able to go to our clients and take responsibility for implementing our solutions. We can make money and create growth this way. And this differentiates us from some of our competitors and this separation is now much more visible to analysts and customers.’


Bankfusion now had 40 takers, of which 27 had signed during the previous year. According to the vendor, seven clients were now live, with four of these for Bankfusion Equation. National Bank of Kenya, a Bankmaster user, was among the new signings for Bankfusion Universal Banking, as well as Parsian Bank in Iraq, which received a banking licence there in 2010. An additional Midas ‘renovation’ recruit was PPF Banka in the Czech Republic. India International Bank, a start- up joint venture in Malaysia between a number of banks (Indian Overseas Bank was one of them), was a new taker of Bankfusion Midas. It also licensed Misys’ Payment Manager, Trade Innovation Plus and Trade Portal. The company grew by 900 people over the year, which it described as ‘a record number of hires’. The recruitment took place in the Middle East, Asia, Africa and Latin America. However, the UK office suffered a cut of around 50 Equation and Midas staff. This meant that 75 per cent of Misys employees


were outside the UK and US. Misys also boasted that it had ‘eliminated £30 million of annual spend on Midas, Equation and Bankmaster’, which was an interesting message for users of these systems.The ‘savings [were] partly reinvested in new products; remainder taken to profit’. In the course of the next year, the vendor planned to


recruit another 900 or so people, said Lawrie. It was building new centres of excellence in Beijing, Bangalore and Manila, ‘to augment customer-facing resources’. Around 40 new hires were anticipated in sales and solutions consulting. In the services field, a nine per cent rise in headcount was on the agenda. Misys was also taking on new implementation partners, with Everis being the latest addition, joining HCL and IBM as Misys ‘key partners’. Despite the fact that the FIS takeover was still pending,


Lawrie pointed to possible M&A activity. ‘We are very active in looking at appropriate acquisitions,’ he stated. These would focus on capital markets including ‘moving to adjacent spaces in the capital markets such as order entry and trade execution’. Thomson Reuters’ trade and risk management business, which was up for sale at this time, was a consideration, he said. Islamic finance was also of interest.


On 4th August, Misys announced that the offer from FIS was no longer on the cards. It said the offer ‘materially undervalues the company’ and so the board ‘unanimously decided to reject it and took the decision to withdraw from further discussions with FIS’. FIS announced it was ‘no longer considering making an offer for Misys’, but reserved the right to bid again in the future. As a result, Misys shares slumped by 16 per cent, making it the largest faller on the FTSE 250 index. An interesting aspect of the FIS episode was that it meant Lawrie was on track to secure the one-off incentive scheme that was negotiated after he joined as CEO in November 2006. At an EGM in March 2007 it was decided that in return for a matching award of four times a personal investment of £500,000 worth of shares in Misys, his target was to raise the share price to 400p. As set out in Misys’ 2007 annual report, ‘the assessment of the extent to which the performance conditions have been met will be based on the highest average share price over a period of 20 consecutive trading days during the period’. The purpose of the incentive was to ‘achieve outstanding absolute returns to shareholders’, according to the report. The deadline to meet this incentive was set at 1st November 2011 and the report also stated that ‘no portion of any award will vest unless the share price at the date of vesting is higher than the share price at the date of commencement of employment.’ In the month Lawrie was hired, the lowest closing price was 237p and the highest 248p.


During the period of the FIS offer, the price ended the day above 400p on a total of 20 days. It first passed 400p on 21st June as news broke of a bid approach, which Misys subsequently confirmed to be FIS Global. That day it passed 418p, having opened at 384p, representing a jump of close to ten per cent. It hovered for 16 days above 400p, scraping


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