Mastercard is in early talks to sell a majority stake in Vocalink, the UK payments infrastructure operator it acquired in 2016 for an initial £700 million ($950 million), according to a Financial Times report published Monday.
The discussions are at an early stage and no firm offers have been made. A sale of a 51% stake could value the transaction at around £400 million, the FT said.
MA stock opened at $526.14 on Monday, within its 52-week range of $464.52 to $601.77. The stock is up 0.68% on the day.
The potential sale comes as the UK government and the Bank of England push for more competition in retail payments. There are growing concerns around US ownership of a strategically important piece of British financial infrastructure.
One potential buyer mentioned in the report is DeliveryCo, a banking industry-backed entity set up to manage procurement for the UK’s next-generation retail payments platform. However, any transaction is seen as unlikely before next year.
Mastercard originally bought Vocalink from a consortium of 18 UK lenders. The deal included additional performance-linked payments on top of the initial £700 million.
Separately from the Vocalink news, analyst activity around MA has been broadly constructive. Barclays this week initiated coverage with an overweight rating and a $640 price target.
BNP Paribas Exane upgraded the stock from neutral to outperform back in March with a $600 target. Raymond James has a $609 target. Royal Bank of Canada lowered its target from $656 to $629 but kept an outperform rating.
Of analysts tracked by MarketBeat, seven have a Strong Buy, twenty-one have a Buy, one has a Hold, and one has a Sell. The average price target stands at $653.78.
Mastercard’s last quarterly earnings, reported April 30th, showed EPS of $4.60, beating the consensus estimate of $4.41. Revenue came in at $8.40 billion, ahead of the $8.26 billion estimate and up 15.8% year over year.
Net margin was 45.88% and return on equity hit 212.96%. Analysts expect full-year EPS of $19.61.
On the institutional side, Applied Finance Capital Management increased its MA position by 4.7% in Q1, adding 2,648 units to bring its total to 58,662, worth roughly $29.3 million.
Worldquant Millennium Advisors lifted its holdings by 35.8% in Q2, picking up an additional 178,387 units. Overall, institutional investors own 97.28% of Mastercard’s stock.
Mastercard also announced a quarterly dividend of $0.87 per unit, payable August 7th to holders of record as of July 9th. That represents a $3.48 annualized dividend and a yield of 0.7%.
The 50-day moving average sits at $499.66, while the 200-day moving average is $517.11. The company carries a market cap of $464.89 billion and a P/E ratio of 30.45.
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