Monitise confirms sale talks underway

A day after nailing up the For Sale sign, troubled mobile payments specialist Monitise has admitted it is in talks with potential buyers and merger partners. Within 20 minutes of the announcement at lunchtime the share price had rocketed 23% to 16p. But with no word on price, its drifted back ahead of the weekend.

"[Monitise] confirms that it has received a number of expressions of interest in a range of potential corporate transactions including a merger with a third party or a sale of the company," the firm said Friday.

"Discussions are at a highly preliminary stage and there can be no certainty that any transaction will result."

Talk is a buyer is most likely to be an existing customer like IBM or MasterCard, but, given the shares have failed to hold onto gains, investors are now banking on a massive premium to current prices.

On Thursday, Monitise issued another profits warning and said it had launched a strategic review which could end up with the business being sold. It blamed its transition to a subscription-based business model for the impact on revenue and subsequent profits shortfall. The City, however, was in no mood for excuses and the shares plunged by over a fifth to five-year lows.

"Monitise remains well funded and debt free with £129 million of gross cash, as at 31 December 2014," the company added Friday. "The board believes that the company has a unique set of global partners and customers, and reiterates its expectation to be EBITDA profitable in FY 2016. The board also reiterates guidance of 200 million users and £2.50 ARPU by end FY 2018, based on the scale of the market opportunity and partnerships in place."

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