Mastercard trumps Visa with £233m offer for Earthport
It’s a bidding war as Mastercard is looking to see off Visa with a £233 million offer for cross-border payments firm Earthport.
New offer
As reported earlier this month, Visa made an £198 million offer. At that time, the board of UK-based Earthport was recommending shareholders vote in favour of the deal.
However, in the latest development, Mastercard has stepped in to upset proceedings.
Earthport’s interim chairman, Sunil Sabharwal, says: “The board of Earthport is pleased to recommend Bidco’s [he could just say Mastercard] cash offer for Earthport, which is at a 10% premium to the Visa proposal. This offer provides our shareholders with even greater value in cash for their shares.”
In a statement, the board of Earthport withdrew its recommendation for Visa’s offer and urged shareholders to back the Mastercard deal instead.
The board has also proposed that a meeting scheduled for 21 February 2019, at which shareholders would have voted on the Visa deal, be adjourned.
A Visa spokesperson declined to comment on this news to FinTech Futures.
Back on Earth(port)
With a planned change of focus Earthport has brought in a new team.
Amanda Mesler joined on 1 July 2018 as CEO, followed by Alexander Filshie who joined on 25 July 2018 as chief financial officer. They have been joined by Helen Smith (chief operating officer) and John Farrell (CTO).
In its latest financial results (ended 30 June 2018), it revealed that total revenues grew by 5.3% to £31.9 million. By comparison, FY2017 was £30.3 million.
Gross profit was broadly flat year-on-year at £20.3 million. In FY2017 it was £20.2 million.
Cash and cash equivalents at 30 June 2018 were £28.3 million (FY2017: £11.9 million), following its capital raising in October 2017 of £24 million.
This new team is its desire for a change of fortune from 2017 when its losses doubled in H2 – and it lost a UK line of business with a major e-commerce client.
In terms of its outlook, Earthport says: “Since the end of June 2018, we have signed a contract with BNPI, went live with Indusind Bank and expanded route usage for multiple key clients.”
In addition, it says two new routes have been enabled to existing customers with more to come in the current year as new routes become fully activated.
