(Reuters) - Visa (V.N) and Mastercard (MA.N) are both seen as suitors for Danish card payment services company Nets A/S (NETS.CO), which confirmed over the weekend it had been approached by potential buyers.
Analysts at Morgan Stanley and Nordea Equity Research both said the U.S. giants could be interested in Scandinavia’s largest payments processor, which had a market capitalization of 26 billion crowns ($4 billion) at Friday’s close.
“Nets can confirm that it has been approached and is reviewing its options. However, it is very early stage and there can be no certainty as to the potential outcome,” the company said in a statement on Saturday.
Shares in Nets jumped as much as 14 percent on Monday following the statement which came after Bloomberg reported that potential buyers, including U.S. private equity firm Hellman & Friedman LLC, were interested.
“We believe interest from pure acquiring companies is less likely. The U.S. payment schemes (Visa & Mastercard) are clearly large enough to be able to acquire a company the size of Nets,” Morgan Stanley analysts write in a research note.
Nordea Equity Research analyst Oliver Schüler Pisani said Visa and Mastercard could be potential bidders for Nets, the issuer of the most used debit card in Denmark, Dankort.
Analysts said Nets’s valuation was attractive. It trades at a discount to both the sector and its closest rival, Worldplay (WPG.L), leaving room for a good takeover premium, Pisani said.
Nets trades at a 12-month price-to-earnings ratio of 14.6 compared with 21.3 for Worldpay Group and 24.6 for Worldline (WLN.PA). Shares in Worldpay rose 1.4 percent on Monday while Worldline was 1.8 percent higher.
Writing by Thyagaraju Adinarayan in Gdynia; editing by David Clarke