Visa to buy UK payments firm Earthport for $250 million
Earthport says Visa’s proposal was ‘fair and reasonable’ and that it would recommend its shareholders take up the all-cash offer
Bengaluru: Visa Inc. is paying £198 million ($250.6 million) to buy Earthport Plc, a British firm that facilitates international transactions for banks and businesses, the US-based payments group said on Thursday. Visa International Service Association, a unit of Visa, has offered 30 pence for each Earthport share, a price that is four times the stock’s Monday closing price of 7.45 pence.
The London-headquartered firm said Visa’s proposal was “fair and reasonable” and that it would recommend its shareholders take up the all-cash offer.
Earthport’s shares, listed on the London Stock Exchange’s secondary market, have fallen more than 28% this year amid growing losses and expenses, forcing the firm to say last month that “fundamental” change was required in its strategy.
Earthport says it offers a lower-cost alternative to traditional payments systems by allowing banks and money transfer firms to have a single relationship instead of multiple ties with various payments channels around the world.
For Visa, cross-border payments, or transactions that involve parties in two or more countries, represents a growing business. The volume of such payments rose 10% in the 2018 fiscal year, Visa said in October. Earthport, which counts Bank of America Merrill Lynch and Japan Post Bank among its clients, said Visa’s offer was a revised proposal that followed an indicative offer from the US company last month.
Rothschild & Co. advised Earthport on the deal, while Goldman Sachs advised Visa.reuters
Editor's Picks »
- Why Tata Motors’ Project Charge at JLR is failing to recharge its shares
- Outlook on global profit growth worst since 2008 financial crisis
- Q3 results: ICICI Securities loses its retail broking crown
- High drug approvals to keep up pricing pressure for pharma firms
- Roads sector: Toll collections set to surge, but risks loom for developers