Temenos figures knock gains made on takeover talk

Temenos figures knock gains made on takeover talk

Shares in Swiss core banking vendor Temenos have dipped nearly ten per cent as weak Q2 figures pare back gains made on the back of recent takeover speculation.

Temenos stock has been bubbling up since news of Oracle's interest in rival core banking vendor i-flex first surfaced last week. Analysts at Merrill Lynch have identified the sector as "an attractive, growing" market, and have even suggested that SAP may look to acquire Temenos to match Oracle's foray.

Temenos CEO Andreas Andreades has done little to discourage the speculation, noting: "The current consolidation phase, with major software companies investing in our sector, will provide significant opportunities for leading international players such as Temenos. We welcome the consolidation and look forward to playing a proactive part in the further development of our sector going forward."

He insists that the firm is neither inviting a bid, nor preparing for acquisitions, merely that the company is "pleased by the consolidation".

His comments come as the firm once again disappointed the market with a set of below-par Q2 figures and the failure to reel in a promised large core banking deal.

Like for like revenues in H1 2005 were US$72.1 million compared to US$74.6 million in the same period, down 3.4%. Reported total revenues for H1 2005 were at US$72.1 million compared to US$78 million in the same period last year, down 7.6%.

Temenos has reconfirmed its target of achieving between two and four large CoreBanking deals by year end, and maintains that a large deal with a Tier One bank is "in final contract stage".

Temenos stock dipped 9.3% on the news to CHF8.61 from an overnight close of CHF9.49. The stock has lost almost 20% of its value in the past year as the vendor has struggled to meet growth expectations.

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