BREAKING NEWS

BREAKING NEWS

Visa to buy British payments firm Earthport for £198 million

Text size Aa Aa

(Reuters) - Visa Inc is paying 198 million pounds to buy Earthport Plc , a British firm that facilitates international transactions for banks and businesses, the U.S.-based payments group said on Thursday.

Visa International Service Association, a unit of Visa, has offered 30 pence for each Earthport share, a price that is four times the stock's Monday closing price of 7.45 pence.

Earthport shares surged in early trading on Thursday and matched the offer price.

The London-headquartered firm said Visa's proposal was "fair and reasonable" and that it would recommend its shareholders take up the all-cash offer.

Earthport's shares, listed on the London Stock Exchange's secondary market, have fallen more than 28 percent this year amid growing losses and expenses, forcing the firm to say last month that "fundamental" change was required in its strategy.

Earthport says it 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.

For Visa, cross-border payments, or transactions that involve parties in two or more countries, represents a growing business. The volume of such payments rose 10 percent in the 2018 fiscal year, Visa said in October.

Earthport, which counts Bank of America Merrill Lynch and Japan Post Bank among its clients, said Visa's offer was a revised proposal that followed an indicative offer from the U.S. company last month.

Rothschild & Co advised Earthport on the deal, while Goldman Sachs advised Visa.

(Reporting by Samantha Machado and Arathy S Nair in Bengaluru; Editing by Sai Sachin Ravikumar)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.