Market Tracker weekly bulletin – 14 February 2019

Market Tracker weekly bulletin – 14 February 2019

A round up of key developments in corporate transactions covered by Lexis®PSL Corporate and Market Tracker this week, including an update on the competing offers for Earthport plc by Visa and Mastercard and a look at developments in the regulation of dividend payments.

Transactions

Takeovers

Earthport’s board wooed by Visa’s beefed up bid

On 27 December 2018, Visa Inc (Visa) announced a recommended cash offer for the entire issued and to be issued share capital of Earthport plc (Earthport). The original offer was at £198 million with a cash consideration for 30 pence per Earthport share.

On 25 January 2019, Earthport received a higher competing cash offer from Mastercard International Inc. (Mastercard). The offer was valued at £233 million with a cash consideration of 33 pence per Earthport share, representing a 10% increase above Visa’s offer price of 30 pence per Earthport share.  As a result of the higher offer, Earthport withdrew its recommendation for the offer from Visa and recommended the Mastercard offer to its shareholders.

On 8 February 2019, Visa increased its offer to £247 million. The offer price was increased to 37 pence per Earthport share representing a premium of 12% to the Mastercard offer price of 33 pence per Earthport share. Visa also elected to switch the structure of the offer from a scheme of arrangement to a contractual offer. In light of the increased offer price, Earthport’s board re-recommended Visa’s offer and withdrew its recommendation of the offer from Mastercard.

In focus: Dividends

In August 2018, the Government issued a response to its March 2018 consultation; Insolvency and Corporate Governance, which was published in the aftermath of the Carillion collapse earlier that year. In its response, the Government outlined plans to strengthen the UK’s framework relating to dividend payments.

One of the issues highlighted was the practice of companies avoiding an annual shareholder vote on dividends through only paying interim dividends, which do not require shareholder approval.  Following the response, the Government asked the Investment Association to report on the prevalence of the practice. The results of their research are yet to be announced. The Government has made clear that if the Investment Association’s report shows that the practice of paying interim-only dividends is widespread, it intends to take further steps to ensure that shareh

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Market Tracker is a unique service for corporate lawyers housed within Lexis®PSL Corporate. It features a powerful transaction data analysis tool for accessing, analysing and comparing the specific features of corporate transactions, with a comprehensive and searchable library of deal documentation across 14 different deal types. The Market Tracker product also includes news and analysis of key corporate deals and activity and in-depth analysis of recent trends in corporate transactions.