Tuesday, 12 February 2019 16:55
Visa in the lead with new Eathport offer
Visa and Mastercard are in a head to head battle for UK payments processor Eathport, with Visa stating it has raised its to 37p per share, valuing the business at £247 million.
So whatever both payments giants say about their competitor being cash, this bidding war illustrates just were their nemesis sits.
Mastercard ruined Visa’s carefully laid plans when it upped Visa’s original £200 million December offer with its own £233 million bid for the group in January.
All of this is good news for Earthport, whose shares jumped by almost 9% to 42p after the news of a new bid today. Mastercard issued a short statement saying: “Mastercard is considering its options and urges Earthport shareholders to take no action in response to the announcement by Visa.”
Another statement from Mastercard is expected in due course.
Visa’s attempt to acquire Earthport is being made via Visa International Service Association, a unit of Visa Inc known as Bidco.
So what does Earthport do that makes it so valuable? The answer lies in its ability to accept cross-border transactions and provide local clearing. On the face of it, the company “provides its clients with access to a global payment network, maintaining local banking partnerships, through which client business is settled directly via local clearing to banked beneficiaries in over 87 countries.”
It has over 200 employees and is headquartered in London, with regional offices in New York, Miami, Dubai and Singapore. In July last year it appointed Amanda Mesler, a Microsoft general manager responsible for the software firm’s enterprise business in Central and Eastern Europe, as its new CEO.
Commenting on today’s increased Visa offer, Sunil Sabharwal, interim chairman of Earthport, said: “The board of Earthport is pleased to recommend Bidco's cash offer for Earthport which is at a 12% premium to the Mastercard proposal.
“This revised cash offer provides our shareholders with even greater value in cash for their shares."
This is probably not the end of the story.