MARKET REPORT: Bidding war between Visa and Mastercard for payments firm Earthport is heating up
The bidding war between Visa and Mastercard for payments firm Earthport is heating up.
Visa sweetened its offer for Earthport from £198m to £247m, blasting Mastercard’s £233m bid out of the water.
Desperate not to be left out of the game, Mastercard then issued an announcement to Earthport’s shareholders urging them not to accept the new bid.
The payments giant said it was ‘considering its options’, giving shareholders hope that yet another increased offer could still be tabled.
Shares in Earthport, which allows clients such as Bank of America Merrill Lynch and Transferwise to complete international payments quickly at a low cost, jumped 16 per cent, or 6.2p, to 45p.
The shares were trading at around 7p at Christmas.
The board, which had changed its allegiance from supporting Visa’s offer to backing Mastercard, jumped back onto Visa’s side.
Sunil Sabharwal, the interim chairman of Earthport, said: ‘This revised cash offer provides our shareholders with even greater value in cash for their shares.’
Both Visa and Mastercard think Earthport will help them expand their cross-border networks, as developments in technology have made payment processing firms hot targets.
One of the biggest landlords in the West End said business is booming in London as shoppers and revellers flock to the capital.
Shaftesbury, which owns 14 acres of property across Chinatown, Soho, Covent Garden, Carnaby Street and Fitzrovia, said its shops, restaurants, cafes and pubs have been buzzing in recent weeks. Chief executive Brian Bickell said: ‘In contrast to reports of subdued leisure spending nationally, our restaurants, cafes, pubs and bars were particularly busy throughout the festive period.’
The comments came as Shaftesbury’s biggest shareholder, Hong Kong billionaire Samuel Tak Lee, voted against the re-election of the Bickell as well as the chairman and finance boss. Lee, who is unhappy with how Shaftesbury is run, also voted down resolutions to approve the directors’ pay and their ability to allot new shares.
The 79-year-old tycoon is threatening legal action.
A spokesman for Lee said: ‘Unless Mr Lee gets a satisfactory response in relation to the concerns he has raised with the board, he will be left with no choice but to litigate and, given the board’s unsatisfactory responses to date, at present this appears unavoidable.’
Shaftesbury shares fell 1.4 per cent, or 12p, to 871p.
The bounce in Thomas Cook’s shares earlier this week proved short lived, as the company tumbled 15.2 per cent, or 5.18p, to 29p. The travel firm, which was struggling with a heavy debt load after last summer’s bookings proved disappointing, enjoyed a brief lift from the doldrums on Thursday as it announced it was considering a sale of its airline.
But cynical shareholders took the chance to bag their profits yesterday, as a spate of selling pressured the stock back down.
Analysts at Morgan Stanley added petrol to the fire, saying that Thomas Cook’s £1 billion price tag for the airline was ambitious and questioning whether – even after the sale – the group would have enough cash to survive.
An uneventful day for the FSTE 100 saw it edge down 0.3 per cent, or 22.4 points, to 7071.18 points.
Investors were cautious after President Trump said he did not plan to meet his Chinese counterpart President Xi before a March 1 deadline to achieve a trade deal.
This could mean the United States plans to re-impose tariffs on China, which may threaten the country’s economy and send ripples across the world.