Monitise Shares Plunge As Visa Considers Options For Stake

(RTTNews) - Shares of Monitise Plc (MONI.L) declined around 23 percent in London trading after Visa Inc. (V) announced Thursday that it is considering its options regarding the 5.5 percent stake in the British IT services and consulting company.

The U.S.-based payment card processor announced the appointment of JP Morgan to ?assist in the undertaking of an assessment of its investment stake in Monitise, which was made in 2009.

In its statement, Visa cited the maturation of Monitise as a company as well as its increased investment in its in-house capabilities for considering its options with respect to the investment. Visa will also be lessening its dependence on external mobile development resources as it intends to continue increasing its investment in its own in-house capabilities.

Visa also stated that its assessment is consistent with its investment practice to seed emerging players and, over time, taper that influence as the partner company grows.

In 2009, Visa invested in Monitise as a 14.4 percent owner of the company in order to provide capital support in the evolution of the mobile payments sector. Over time, Visa's holdings have been reduced to its current 5.5 percent stake in the company.

Alastair Lukies, joint CEO and founder of Monitise, noted that at the time of the investment, it was a company of around 80 people with revenue of less than 3 million pounds and a primary focus on mobile banking. For fiscal 2014, the company recently reported revenue of 95.1 million pounds.

Bill Sheedy, EVP of Corporate Strategy, Visa, said, "Visa invested in Monitise as an early thought leader with a vision of making mobile banking mainstream and extending that functionality to mobile payments. Over the past 5 years, Monitise has successfully demonstrated its leadership in the sector underscored by the company's marquee clients, multiple network partnerships and recent agreement with IBM."

Under their agreement, Monitise will provide Visa with mobile platform development services through 2016. In London, Monitise shares were losing 10 pence or 23.53 percent, and trading at 32.50 pence.

On the NYSE, Visa shares settled at $215.53 on Wednesday, down $1.77 or 0.81 percent.