American multinational financial services firm Mastercard has proposed to acquire UK-based fintech company Earthport for about £233m in an all-cash deal.
Image: Mastercard offers to acquire Earthport for £233m. Photo: courtesy of rawpixel/Unsplash.com.
The proposed acquisition of Earthport will be carried out by Mastercard UK Holdco, the wholly-owned subsidiary of the global payments company.
The boards of Mastercard UK and the fintech company have reached agreement on the terms of the former’s proposal.
Based in London, Earthport is focused on enabling cross-border payments. The company through its regional offices in New York, Miami, Dubai and Singapore, provides its clients access to a global payment network.
Earthport also boasts of local banking partnerships under which client business is directly settled via local clearing to banked beneficiaries based in more than 87 countries.
Last month, Mastercard’s rival Visa offered to acquire the cross-border payments firm for around £198m through its subsidiary Visa International Service Association (Bidco).
As per the Mastercard offer, Earthport’s shareholders will receive 33p for each share they hold in the fintech company. The latest bid received by the UK firm represents 10% more than the offer price of 30p per share given by Visa.
Earthport’s board of directors has unanimously recommended the company’s shareholders to accept Mastercard’s offer. The company’s board as a result has withdrawn its earlier recommendation of the Visa proposal.
The company’s interim chairman Sunil Sabharwal said that the proposal from Mastercard provides shareholders with even greater value for their shares.
Mastercard, in a statement, said: “With Mastercard’s experience as a global network, its bank distribution, technology and reach, including Mastercard Send and Vocalink’s faster payment capability, financial stability and brand, Mastercard UK Holdco believes Mastercard can complement and enhance Earthport’s existing capabilities and allow it to accelerate development of a more robust account-to-account cross-border network service.”
Last month, Mastercard announced a partnership with BLIK operator Polish Payment Standard (PSP) to offer new value to consumers and financial institutions across Poland. BLIK is Polish mobile payment system and scheme, which was launched in February 2015.
The partnership will offer contactless payments to BLIK users at all Mastercard branded terminals in the world, thereby enabling Mastercard virtual debit cards tokenized by Mastercard Digital Enablement Services (MDES).