Shares in card processing firm Paysafe shot up today after two of the world's largest private equity groups made a $3.7bn (£2.8bn) takeover offer.
Paysafe shares rose 8.7 per cent to 589.1p in early trading, after the FTSE 250-listed company said CVC Capital Partners and Blackstone had made an initial offer for it in May, before hiking it to 590p per share, a 34 per cent premium to its average price in the six months to the end of June.
The bid has support from Old Mutual, which, with a 10.3 per cent stake, is Paysafe's biggest shareholder. It has sent Paysafe a non-binding letter indicating it intends to vote in favour of the offer.
Paysafe takes over
The news came as Paysafe announced it had bought Delta Card Services, the owner of Texas-based payment processor Merchants' Choice Payment Solutions, for $470m.
The company supplies card processing services to approximately 60,000 merchants in 50 states, processing $14bn of sales each year.
The all-cash deal will be funded with a $380m loan facility underwritten by BMO Capital Markets, Deutsche Bank and other lenders, plus $90m of existing funds.
Share price hike
In March Paysafe unveiled full-year results showing profits had almost doubled to $213m in 2016, up from $108.7m the year before.
Shares had increased more than five times in as many years as consumers and retailers increasingly demanded easier, faster and safer ways to pay and transfer money.
Last year it also revealed plans to launch a mobile-enabled wallet, allowing consumers to pay for goods using their mobile phones.