(Adds chairman's comments, share price and context)
LONDON (AFX) - The chairman of banking-to-healthcare software developer Misys PLC, which last week terminated talks with a management buyout team led by its former chief executive, said he hopes to appoint a new chief executive within two weeks to help restore stability to the company
Speaking at the company's annual general meeting, Dominic Cadbury also defended the company's handling of a three-month offer period which failed to result in a firm bid for the company.
'We have been conducting a search for a suitably-qualified chief executive (since the beginning of the offer period in June) and hope to make a further announcement by the middle of October,' Cadbury said during an AGM which saw the board come under fire from shareholders, angered at the failure to find a buyer and the slump earlier this week in the company's share price.
'A change in leadership is bound to involve a change in direction.'
He added the company had drawn up a shortlist of candidates, mainly from within the software industry.
Former chief executive Kevin Lomax, who founded the company in 1979, was behind an initial management buyout approach in June, which was reported to have the backing of private equity firms Permira and General Atlantic.
Lomax's move flushed out interest from a number of trade buyers, believed to include US technology groups Fiserv and SunGard.
There was also a team of three former Misys directors, a management buy-in team, who wanted to assume control of the business and de-merge the divisions in an effort to improve the company's performance.
A weekend press report in the Financial Times claimed that due diligence by the private equity firms revealed that more work would be needed to rebuild Misys than previously thought.
One shareholder at the AGM described Misys's recent performance as 'thoroughly shambolic', while another questioned why members of the board were due to be paid bonuses despite the company's poor performance.
Cadbury admitted that Misys's performance over the past year had been 'disappointing' but repeated that the board had made the right decision to terminate the takeover talks because no party had come up with a firm offer.
'We made it clear to parties (during the offer period) that we were prepared to be flexible (about the price paid for Misys) but despite this the parties did not put an offer on the table,' Cadbury said.
However, Cadbury said he would consider one of the management buy-in team members for the post of chief executive.
Cadbury said the strength of Misys in the US healthcare and banking markets boded well for the future but admitted that the company's products need to be improved.
'One criticism is that (Misys's) product development has not kept pace with changing product development in the industry,' Cadbury said. 'Perhaps we have been complacent on relying on products that have served us well in the past but have not been on the leading edge.'
Speaking after the AGM, one of the management buy-in team members, Ross Graham, criticised the handling of the bid process and said the team's proposal had been backed by around one third of Misys shareholders.
At 3.18 pm, Misys shares were up 0-1/2 pence at 189-1/2, valuing the company at 948 mln stg.
Misys shares lost almost a fifth of their market value on Monday after it announced the termination of talks with the management buyout team. nick.huber@afxnews.com nh/joy/nh/rw COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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