• Friday, March 29, 2024
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BusinessDay

UPDATE: Visa said to Target 20% Stake in Nigeria’s Interswitch ahead potential 2020 London IPO

Visa

 

The  amount is $200 million. That’s what Visa, US-based global retail electronic network, is said to be considering for a 20 percent stake in Interswitch ahead of a potential listing of the Nigerian-based payments-processing company on the London Stock Exchange (LSE) next year.

Interswitch, owner of Verve card and Quickteller payment application, is a leading Africa-focused integrated digital payments and commerce company headquartered in Lagos.

According to sources, Visa is in latter stages of a discussion to become a cornerstone investor, owning up to a fifth of Interswitch, before the latter’s LSE debut in the first half of 2020, an IPO that has been delayed since plans of a dual listing on the Nigerian Stock Exchange (NSE) and the London counterpart were announced in 2015.

Cornerstone investors, also known as anchor investors, are well-known institutional or individual investors that are invited to subscribe for shares ahead of an IPO to boost market’s confidence about the company’s shares to be floated.

News of the deal comes just a few months after Mastercard, another US-based global payments & technology company, invested $300 million in Dubai-based Network International, the largest payments processor in the Middle East and Africa, ahead of its London IPO.

A deal between Visa and Interswitch would see the former mimic rival, Mastercard, as both vie for the large, fast-growing but underserved digital markets in Africa-and the Middle East.

Interswitch’s reach extends to millions of users in 23 African countries including Kenya, Uganda and Gambia, and has presence offshore, making it a suitable partner for Visa.

JPMorgan Chase & Co., Citigroup Inc. and Standard Bank Group Ltd. are among the banks said to be working on the flotation that would create another African tech unicorn (a startup valued at $1bn or more) after Jumia’s eventful LSE listing in April.

Interswitch had stalled the planned IPO (via dual listing) in 2016 when the domestic economy plunged into a recession following a downturn in the global oil market.

Earlier this year, Bloomberg reported that sources said the dual-listing would be concluded before the end of 2019.

In response, the company told Techcrunch it does not comment on “market speculation”.

A possible target for 2020 would make about a half-decade since Interswitch had announced going public.

Experts believe various listings on NSE and LSE in 2019 including the dual listing of Airtel might have inspired the reconsideration to go public.

The Visa-Interswitch deal is expected to be announced this week but neither company has made any comment or public acknowledgement.

Interswitch was founded in 2002 by Mitchell Elegbe.  The fintech’s majority shareholder is Helios Investment Partners, a private equity investing firm operating in Africa and based in London.