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Hogg Robinson surges on AmEx offer as it agrees sale of Fraedom business
Shares in Hogg Robinson surged on Friday as the business travel group announced a takeover offer from American Express and said it has agreed to sell its payments technology business, Fraedom, to Visa Inc.
AmEx's Global Business Travel will pay a minimum of 110p per share in cash, plus an additional consideration of up to 10p depending on the sale of the Fraedom business.
Meanwhile, Visa will pay £141.8m in cash for Fraedom, which is a software-as-a-service technology company providing payments and transaction management solutions for financial institutions and their corporate customers.
Hogg Robinson said that neither transaction is conditional upon completion of the other, adding that if the proposed takeover does not go ahead, the net cash proceeds from the Fraedom sale will strengthen the financial position of the group and could be used to invest further in and grow the remaining business, make payments to the Hogg Robinson UK pension scheme and/or potentially return capital to shareholders.
Chief operating officer William Brindle said: "Today's deal is attractive for Hogg Robinson Group's shareholders and an exciting next step for Fraedom. This combination will mean that Fraedom's employees and their clients will benefit from Visa's reach and deep knowledge of the digital payments industry.
"Under the company's leadership, Fraedom has become a leading software-as-a-service technology company and we wish them further success under new ownership."
At 0920 GMT, the shares were up 49% to 116.10p.