Fiserv Sweetens the Pot to Take Monitise

August 9, 2017         By: Steven Anderson

Back in June, we first heard about Fiserv’s plans to pick up Monitise in a deal valued around 70 million pounds sterling. Apparently, that wasn’t enough for Monitise to move quickly, and Fiserv—demonstrating its clear interest in picking the company up—has upped the ante and is now offering about 75 million pounds sterling—about $97.66 million US as of this writing—for the company.

Monitise’s investors, particularly Cavendish Asset Management, pointed out that three years ago, Monitise was worth fully a billion pounds sterling, so Fiserv’s bargain-basement offer just wouldn’t do. Of course, Fiserv isn’t writing a check three years ago, back before the legion of smartphone Pay systems got involved—Apple Pay, Samsung Pay, et al—so some discounting had to take place.

However, other investors were clearly interested; Banco Santander—the largest single shareholder at 4.67 percent of the company—already offered a letter of intent to back the Fiserv deal. Visa, with 2.41 percent of the firm, did likewise. Reports note that Fiserv had already gathered letters of intent or similar undertakings for 229.6 million shares, a combined total that represented just under 10 percent of the overall company.

Fiserv’s new offer, however, represents a premium of fully 34.8 percent over the share price on June 12, back when the first offer was tendered. Naturally, Fiserv turned directly to the shareholders and encouraged same to accept the offer, noting that Monitise’s board was already looking to raise new capital and even divest the business outright.

Monitise made a smart move by holding out. There’s no doubt of that, as Fiserv ultimately sweetened the pot and added a little extra juice to the offer. Granted, Fiserv would ultimately be getting Monitise for what amounted to pennies on the dollar from its highs a few years back even with this price upgrade, but Monetise’s fortunes in the field have been badly hit by the growing numbers of competitors emerging.

Smartphone makers, banks, even individual businesses offer mobile payments services now, and for Fiserv to come in and make an offer on Monetise’s clearly sagging business is likely a move Monetise should take. Still, they made the right move by holding out, but now would likely be the time to take Fiserv up on its offer and carry on with fresh cash.