On Friday, Visa Inc, raised its offer for Earthport Plc, a payment company, to approximately 247 million pounds, pushing past the earlier bid presented by rival Mastercard Inc and setting up a showdown for the assets.
One of the units of Visa offered 37 pence in cash for every share of Earthport, a 23 percent premium to its original bid and 12 percent higher as compared to the offer of Mastercard that was presented last January.
The shares of Earthport have increased by more than five-fold to 38.80 pence since Visa initially offered to acquire the company.
Earthport had backed the Mastercard bid. It said that it was now recommending that the shareholders accept the increased offer of Visa.
As a response to the announcement of Visa on Friday, Mastercard said that it was still considering its options and urged the shareholders of Earthport to take no action.
Both Mastercard and Visa have cited the same reason for their interest in Earthport – the deal would enable it to expand its cross-border network service.
In the last two years, payment processing has become one of the most essential areas for deal-making. It is driven by technological changes in the way that the consumers pay for products.
Last year, the shares of Earthport dropped by 28 percent until the first bid. It offers a lower-cost option to traditional payments systems by allowing money transfer firms and banks to have a single relationship instead of multiple links with various payments channels across the globe.