Shares in Misys have soared on Wednesday morning:
The reason is a complex deal that will see the UK software company sell the bulk of its 54 per cent holding in Allscripts, a Nasdaq-listed provider of electronic health care records, and return over £700m to shareholders.
This is something of a coup for Misys boss Mike Lawrie, as the company has almost doubled its money since injecting its health care business into Allscripts a couple of years ago.
However, their remains more to do if Lawrie, who is a partner at the private equity company which happens to be Misys’ biggest shareholder, wants to cash in.
From the 2009 Misys remuneration report:
Not surprising then, that some City analysts see today’s news as either the prelude to a break-up or a bid for the company. Here’s PiperJaffray:
Our anticipated shift in the equity story on Misys shifting towards a possible breakup as we move through 2010 is coming through.
And Canaccord Genuity:
Misys has announced it is merging Allscripts with Eclipsys and selling down its stake from 55% to 10%. This then is the effective break-up of the company. Our initial assessment is that a price target of 290p is justified on the basis of putting the residual banking divisions on 14 times May 2010 earnings. We upgrade our price target accordingly (was 180p) and move our recommendation to BUY.
And Numis Securities:
In our view, if the remaining business is viewed as a strategic asset (e.g. by Temenos) then 300p/share would not be unreasonable.
Related link:
Misys moves to sell Allscripts stake – FT