Shares in Dubai-based payments specialist Network International (NETW) jumped by a fifth on its first day of conditional trading, valuing the group at £2.5bn on the day the shares were officially admitted to London's main market. Network’s IPO was priced at 435p – the bottom-end of a narrowed 430p to 450p range, but above the mid-point of the original 395p to 465p range announced on 1 April 2019.
In terms of industry trends, Middle East and Africa has proved to be “one of the strongest engines” of growth in cashless transactions, enjoying a CAGR of 14.2 per cent between 2012-17. More broadly, global digital transactions increased by 9.1 per cent to 504bn.
The institutional offer entailed 200m shares and did not generate proceeds for Network itself, with selling shareholders including Emirates NBD Bank and private equity firms Warburg Pincus and General Atlantic. Meanwhile, Mastercard (US:MA) made a $300m (£229m) cornerstone investment in the IPO – constituting 9.99 per cent of Network’s shares at the time of admission.
Only recently, Mastercard was seeking to buy Aim-traded payments business Earthport (EPO) – although its offer lapsed on 8 March, leaving Visa International Services Association’s (recommended) £247m offer alone on the table. The Competition and Markets Authority is considering whether Visa International Services Association’s acquisition of Earthport may be expected to result in a substantial lessening of competition within the UK.
Network’s independent chairman Ron Kalifa is also an executive director at Worldpay (WPY) – where he was formerly chief executive for more than a decade. Worldpay recently announced that it had entered a definitive merger agreement with US financial services technology giant FIS (US:FIS) – valuing the group at $43bn. However, regardless of whether this deal completes, Worldpay plans to take its shares off the London Stock Exchange. The number of shares being traded here has “decreased significantly” since its tie-up with US peer Vantiv in January 2018.
