Emirates NBD has attracted a wealth of
bids from private equity groups following the announcement that it
is to sell its payment processing business Network
According to a report in the Financial
Times, the Dubai-based bank is seeking to sell a minority
share in Network International, valued at $1bn to $1.5bn, in order
to fund the company’s growth and shore up its balance sheet.
Bidders include private equity houses TPG, Abraaj Capital,
Silverlake and Emirates Investment Authority, the UAE’s sovereign
“The business has attracted serious
international attention,” one person close to the auction told the
Financial Times. “It is hard to say where the valuation
will end up as other businesses worldwide are being sold at a
premium, so haggling is going to go on.”
Payment processing companies are particularly
attractive in emerging markets as there is more scope for expansion
into online and mobile payment services.
Private equity groups all over the world have
zeroed in on the card processing sector as a fertile area for deals
as banks look to free up extra funds and raise capital in the wake
of the economic crisis.
The UK’s Royal Bank of Scotland is currently in
talks with US private equity firms over the £2bn-£3bn ($3bn-$4.5bn)
valued sale of its Global Merchant Services division, while a
consortium was rumoured another private equity group made a $15bn
bid to buy Fidelity National Information Services.