Mastercard set to buy part of Travelex

Friday, 10 December 2010 00:01 - - {{hitsCtrl.values.hits}}

London/Brussels (Reuters): MasterCard is set to buy the card programme management arm of British foreign exchange group Travelex and a deal may be announced on Thursday, sources with knowledge of the matter told Reuters.

The sources said the deal was expected to be worth several hundred million pounds. Mastercard said it was preparing a statement for 1230 GMT, but declined to say whether it would announce an acquisition.

The Travelex business which Mastercard is poised to acquire manufactures “cash passports” for those travelling overseas. These take the form of prepaid cards which can be used at cash machines or to make purchases at point of sale.

One source said the deal would provide Travelex with extra cash for its own expansion plans.“It is a good deal as it will bring in a lot of resources and will help them accelerate their expansion,” said the source.The sources said the deal would not change the shareholding structure of Travelex, majority-owned by private equity group Apax and often touted as a potential candidate for a listing.Travelex founder Lloyd Dorfman, who set up the company in 1976, also has a significant stake in the group.

Travelex reported a 3 percent dip in first-half earnings in September, saying at the time it was confident its full-year profit would be higher than in 2009.