Visa (V) turned the tables on archrival Mastercard (MA) by upping its offer for British payments firm Earthport to $320 million, topping the $305 million offer from Mastercard last month. Visa stock fell.
Under the new offer, Visa would pay 37 British pence in cash for each Earthport share. This is 23% more than its initial bid. Mastercard’s tender valued Earthport at 33 British pence per share.
Earthport’s board has again switched sides to recommend Visa’s latest offer. Visa told the Financial Times it has received a commitment to support the offer from shareholders controlling around 17% of Earthport stock.
Meanwhile Mastercard has said it is “considering its options and urges Earthport shareholders to take no action,” which suggests it could enter the fray once more with an increased bid of its own.
Earthport allows banks, money transfer service providers and businesses to transfer money across borders without having to deal with local regulators and banks.
Visa Stock Slips
It remains to be seen whether the new Visa bid will be the winning offer. Earthport shares have surged to 44 pence on the London Stock Exchange’s secondary market, suggesting investors expect an even larger bid.
Payment processing has seen a spate of M&A action over the past two years. New technology is changing the way consumers pay for products, and big players Mastercard and Visa are working to stay at the forefront of the trend.
YOU WILL ALSO LIKE: