Alphyra takeover bid in trouble

ATTEMPTS by Alphyra, the electronic payments firm taken private by management last year, to acquire British company PayPoint have run into trouble.

The Irish firm announced yesterday that it had agreed to buy a majority stake in PayPoint from its existing owners, which includes British Telecom and EDF Energy, a subsidiary of French utility company Electricité de France. It said the British firm is valued at €116 million and was also seeking to make an offer to the remaining shareholders.

However, PayPoint, Britain's leading network for collecting payments, says the offer to buy the 52% stake held by BT and EDF is too low.

PayPoint said in a statement: "Under the articles of association of the company, no change of ownership can occur without the price being agreed by the board, or in the absence of that, the board will obtain an expert determination of the fair, market valuation for the company.

Neither of these events has occurred and it remains the view of the chairman, executive directors and the director representing the single largest block of shares that the company is worth significantly more than the indicative offer of £80m."

The offer values PayPoint at 12 times its 2003 earnings, which is a standard measure, and the move by PayPoint's remaining shareholder could be an attempt by some of the remaining shareholders to boost the prices.

Alphyra has binding contracts to acquire BT's and EDF's stake.

Alphyra said: "The valuation is full, the offer is strong and Alphyra is confident of successfully concluding this transaction over the coming weeks."

PayPoint has 10,000 outlet outlets across Britain and claims to have more than three million customers using its services every week and over €2.5 billion worth of payments is collected by PayPoint each year on behalf of over 300 client companies that include British Telecom, British Gas, Vodafone, T-Mobile and London Electricity.

The takeover price Alphyra is paying for PayPoint is higher than what its chief executive John Nagle paid when he and other members of management took Alphyra private last March last March. Alpyhra is backed by the venture capital company Benchmark, whose European arm is run by the former Esat Digifone boss Barry Maloney.