U.S. financial technology firm Fiserv Inc. increased its offer for U.K. payments company Monitise Plc, valuing the latter at about £75 million.
The two companies had agreed on the terms of a deal worth £70 million, or 2.90 pence per share, in June. However, Monitise's largest investor, Cavendish Asset Management, protested the transaction, arguing that the valuation was too low.
The boards of Fiserv and Monitise said Aug. 7 that they have now agreed an increased and final offer of 3.10 pence in cash per Monitise share. This represents a 34.8% premium to Monitise's closing price June 12, the last trading day before the initial announcement, the firms said.
The revised offer will not be increased except in the event of counterbids by other parties. The purchase price will be funded through debt funding from bank facilities provided to Fiserv. Monitise would be delisted from the London Stock Exchange's AIM market shortly after the takeover date.
Fiserv pointed to various challenges facing Monitise, saying its revenue "continues to decline and outstrip cost-cutting initiatives;" that its cash balance "continued to decline during the period to June 30;" and that there are "substantial uncertainties" about its ability to benefit from tax losses. It urged shareholders to accept the new offer.
J.P. Morgan Securities LLC, together with affiliate J.P. Morgan Ltd., is acting as financial adviser to Fiserv. Canaccord Genuity Ltd. is acting as financial adviser to Monitise.