Misys to sell healthcare unit stake; analysts talk up break-up value

Misys to sell healthcare unit stake; analysts talk up break-up value

Shares in Misys soared 20% in morning trading after the UK software vendor outlined plans to sell most of its stake in US healthcare subsidiary Allscripts for around $1.3 billion and return most of it to shareholders through a stock buyback.

The move sees Misys effectively break itself up and concentrate on the remaining financial services-focussed business, consisting of banking and treasury and capital markets units.

By selling the majority of its 54.6% stake in Allscripts - between 60 million and 70 million of its 79.8 million - Misys is paving the way for the unit to merge with rival Eclipsys. Eclipsys shareholders will receive 1.2 Allscripts shares per Eclipsys share, a 19% premium on Tuesday's closing price.

Misys says that from the proceeds of the sale, $108 million will be used to pay down debt, wit the rest, over $1.2 billion, returned to shareholders through the proposed tender offer.

The vendor says the sale and proposed tender offer are expected to be "significantly enhancing" to earnings per share.

Mike Lawrie, CEO, Misys, says: "Following separation, we will continue to focus on leadership in our financial services markets, through taking to market innovative software solutions, notably our BankFusion suite, and providing high quality implementation and customer services."

Meanwhile, the company has also named Stephen Wilson CFO. He joined Misys in May 2009 as VP, group finance and now replaces James Gelly, who is returning to ValueAct Capital.

The City reacted positively to the move, with some analysts viewing the sell-off as the prelude to a more concerted break-up of the group. This perspective was crystalised in a note from 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."

Shares in Misys were up 18.7%, or 41.8 pence, to 265.3 pence in mid-morning trading.

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