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Mastercard tops Visa's offer to buy British payments firm Earthport
[BENGALURU] Mastercard Inc made a 233 million pound (S$416.4 million) bid to take over payments firm Earthport Plc on Friday, as it looks to head off rival Visa Inc's attempts to buy the British company.
Mastercard's offer is at a 10 per cent premium to Visa's 198 million pound offer. Visa said later in the day that it would consider its options, without giving further details.
Earthport's shares, which have risen four-fold since Visa first offered to buy the company, rose another 30 per cent on Friday.
Mastercard said the Earthport deal would allow it to expand its cross-border network service, the same reason cited by Visa when it made its bid in December.
The rival bid comes after Earthport's shares, listed on the London Stock Exchange's secondary market, fell more than 28 per cent in 2018 amid growing losses and expenses. In November, the company said "fundamental" changes were required in its strategy.
Payment processing has become one of the hottest areas for deal making in the last two years, driven by technological changes in the way consumers pay for products.
Earthport 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.
Earthport's directors have unanimously recommended Mastercard's offer and withdrawn their recommendation for Visa's proposal, the company said.
Mastercard shares were up 1.8 per cent, while Visa shares were up 1.1 per cent on the New York Stock Exchange.