Brookfield enters race for UAE’s Network International with $2.7b proposal

Proposes deal at 400p per share compared to CVC-Francisco Partners consortium’s 387p bid

By Reuters

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Published: Fri 21 Apr 2023, 2:12 PM

Canada’s Brookfield Asset Management has made a counter bid of £2.13 billion ($2.7 billion) to take over payments provider Network International, topping a joint proposal from CVC Capital and Francisco Partners.

UAE-based Network International said it was evaluating Brookfield’s proposal, in what could be the start of a bidding war for the largest payment processing firm across the Middle East and Africa.

Brookfield offered 400 pence per share versus 387 pence in the joint proposal from private equity firms CVC Capital and Francisco Partners which was disclosed on Monday.

Shares in London-listed Network International rose more than 11 per cent to 400.2 pence in early trade, indicating an offer around that price would be acceptable.

Analysts believe the company is set to benefit from changes in payments and financial services infrastructure in the Middle East and Africa.

Brookfield, which has over $5 billion in assets under management in the Middle East, last year bought a 60 per cent stake in Magnati, the payments business of First Abu Dhabi Bank.

With Magnati being the No.2 payment processor in the UAE, that would give Brookfield roughly 60 per cent to 65 per cent of payment volume in the UAE, Credit Suisse analyst Justin Forsythe said.

But having two proposals on the table strengthens the likelihood of a deal for Network, Forsythe said.

Network International, whose top investors include Capital Research and Mastercard UK, listed in London in April 2019 at an initial public offering price of 435 pence a share.

Network International provides payment gateways for online merchants. Its website showed it recorded more than $42 billion in processed volumes for more than 150,000 merchants in 2021.

It had said on Monday that it was considering recommending the proposal by the consortium if a firm offer was made.

CVC Capital and Francisco Partners have until May 11, while Brookfield has until May 19, to either make a firm offer for the company or walk away.

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