Fiserve has managed to secure a significant 9.9% of Monitise’s issued share capital in its bid, thus ensuring that the bid is likely to sail through.
Fiserv, a U.S. fintech company has upgraded its offer to $98 million (75 million pounds) for acquiring Monitise, hoping to secure financing for it from investors in the British financial services technology group.
The company’s earlier offer of 70 million pounds had drawn the ire of Monitise’s investors led by Cavendish Asset Management, for being too low. Monitise was worth more than 1 billion pounds three years ago.
Fiserv’s new and final offer of 3.1 pence in cash per share represents a premium of 34.8% over Monitise’s closing price on June 12.
According to Monitise, its directors had unanimously recommended the Fiserv’s final offer, which is higher than its earlier offer of 2.9 pence per share bid.
On its part, Fiserv has urged Monitise’s shareholders to accept its offer, saying if the deal were to fall through, Monitise would have to fall back on it’s contingency plan of raising further capital and divestment of the business, which its board has recommended earlier.
Incidentally, the values of fintech firms have surged and the sector is seeing a proliferation of mergers and acquisitions with shoppers increasingly switching to contactless payment options, including smartphones and other mobile devices over cash to make their purchase.
Monitise’s top shareholder, Banco Santander, which has a 4.67% stake in the company has submitted a letter of intent backing the deal. The deal is also being backed by Visa Inc, which has a stake of 2.41%.
These letters of intents along with Monitise directors’ shares, mean that Fiserv has irrevocable undertakings to the tune of 229.6 million shares, which represents 9.9% of Monitise’s existing issued share capital.