Canada's Brookfield Asset Management has reached an agreement with Dubai-based Network International to buy the payments provider for a cash offer of 2.2 billion pounds ($2.76 billion) for the entire issued and to be issued share capital.
The Brookfield offer implies an enterprise value multiple of approximately 15.7 times Network's EBITDA for the financial year ended 31 December 2022, the companies said in a regulatory disclosure on the London Stock Exchange, where Network shares trade.
London Stock Exchange-listed Network's shareholders are entitled to receive 400 pence in cash for each Network Share held, representing a premium of about 64% to its closing price on April 12, the last business day prior to the start of the offer period.
Network shares are trading nearly 6% higher at 384.40 pence on Friday morning at 9 a.m.
Sir Ron Kalifa, Chairman of Network, said the offer represents an opportunity for Network shareholders to "crystallise, in cash, the value of their investments at a significant premium."
"The Board has carefully considered the Brookfield offer in the context of the long-term growth prospects and opportunities available to the business, balanced against the current challenges and uncertainty in the global macroeconomic environment and the expected timeframe that would be required to generate a similar level of value creation for Network shareholders."
Brookfield, which made the offer through its subsidiary BCP VI Neptune Bidco Holdings Limited (Bidco), believes that Network is a highly attractive business, with a strong position in the large and fast-growing MEA payments space. Plus, it has a diversified and long-standing customer base, a strong network of regulatory licences, a strong financial profile and robust profitability.
In May, Network extended the deadline to June 1 for Brookfield to make a firm offer, following its a $2.7 billion takeover proposal in April.
Brookfield bought a 60% share in the First Abu Dhabi Bank's (FAB’s) payments processing business, Magnati, last year and believes there is strategic and industrial logic in pursuing a potential combination of Network and Magnati.
Dubai-based lender Emirates NBD holds 6% in Network International. The payments provider operates in more than 50 countries, serves more than 150,000 merchants and 200 financial institutions, whilst managing 18 million payment credentials, according to its website.
(Reporting by Brinda Darasha; editing by Seban Scaria)