US-based payments technology giant Visa has hired JP Morgan to review options for its 5.5% stake in UK mobile payment provider Monitise.
Visa, which in 2009 secured a 14.4% interest in Monitise, has over time reduced its stake in the company.
The move…
US-based payments technology giant Visa has hired JP Morgan to review options for its 5.5% stake in UK mobile payment provider Monitise.
Visa, which in 2009 secured a 14.4% interest in Monitise, has over time reduced its stake in the company.
The move is consistent with its strategy to seed emerging players before tapering that influence as the partner company grows, Visa said in a statement today.
“Over the past five years, Monitise has successfully demonstrated its leadership in the sector underscored by the company’s marquee clients, multiple network partnerships and recent agreement with IBM,” said Visa EVP of corporate strategy Bill Sheedy.
“Consistent with Visa’s increased investment in our in-house capabilities, and the substantial growth in Monitise, Visa is considering its options with regard to its Monitise stake.”
Following the announcement, shares in Monitise fell about 30% to £0.29, giving it a market cap of £584m as TelecomFinance went to press.
According to Mark Palmer from BTIG Research, the evaporation of about a quarter of Monitise’s market capitalisation was out of proportion to its likely impact on the company’s prospects, “including its likelihood to eventually be taken over at a significantly higher share price by IBM or another suitor seeking to enhance its role in the global mobile money space”.
Visa and Monitise also inked a commercial agreement in 2009, which runs until 2016, for the provision of mobile platform development services.
In a statement, Monitise said that it will continue its alliance with Visa and “reiterates it guidance for this financial year, its expectation to be EBITDA profitable in FY 2016 and its longer-term guidance for 2018”.
