Partnerships / Acquisitions

Earthport Bidding War Heats Up As Visa Ups The Ante

mergers and acquisitions

The bidding war over U.K.-based payments firm Earthport – squarely in the crosshairs of card giants Visa and Mastercard – is heating up.

On Friday (Feb. 8), Financial Times reported that Visa boosted its bid for the company to roughly 247 million pounds, topping the 233 million that had been offered by Mastercard last month.

The latest offer equates to about 37 pence, which in turn is about 23 percent above the original bid that started the back-and-forth, and which came in December of 2018. It also tops the price offered by Mastercard – and agreed upon by Earthport two weeks ago – by 12 percent.

Now, Earthport has recommended that holders accept the latest offer.

Mastercard, for its part, has said that it was, as reported in FT, “considering its options and urges Earthport shareholders to take no action.”

As has been documented in this space, the British firm has focused on cross-border payments for financial institutions. The company helps those clients send and receive funds without having to manage local relationships with regulators and other parties.

Visa has said that the proposed deal is one where Earthport “can complement the development of Visa’s payment solutions” and may consolidate at least some of the U.K. company’s offices and data centers into Visa’s network. But the proposed deal means, too, that Visa does “not expect to make a material change in the balance of skills and functions of the employees and management of Earthport,” as noted in the report.

Might the bidding war continue? Perhaps – and the fact that Earthport shares are up 9 percent intraday signals investors’ hope that another volley may be in the offing (and have rocketed up several hundreds of percentage points since December). Mastercard, by signaling that it is mulling its options, may indeed follow up with a new proposal.

Stay tuned.

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