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Brookfield Asset Management Ltd. has agreed to acquire London-listed Network International Holdings PLC for about £2.2 billion (US$2.8 billion) to expand its presence in credit card processing in the Middle East.

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The Canadian investment group reached a deal to pay 400 pence per share in cash, according to a statement on Friday. That represents a premium of about 64 per cent to Network International’s closing price on April 12 — the last business day before the start of the offer period.

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Shares in Network International rose as much as six per cent on Friday. The stock was up 5.7 per cent at 12:35 pm in London, giving the company a market value of about £2 billion.

Brookfield emerged as the front runner to acquire the Middle Eastern credit card processor after interest from a consortium including CVC Capital Partners and Francisco Partners cooled, Bloomberg News reported previously.

In its statement, Brookfield said it sees strategic logic in pursuing a combination of Network International and Magnati, the payments business it took control of from First Abu Dhabi Bank PJSC last year. Any such combination would create a payment giant in a region where the use of digital wallets is accelerating.

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In April, Brookfield made a preliminary offer of 400 pence per share for Network International, topping an earlier 387 pence proposal from CVC and Francisco Partners. The potential synergies between Network International and Magnati gave the Canadians an advantage over its buyout competitors.

CVC and Francisco Partners did not intend to make a counteroffer, according to people familiar with the matter, who asked not to be identified discussing confidential information. A representative for CVC declined to comment, while a spokesperson for Francisco Partners couldn’t be reached for comment.

Buyout boost

The deal is another boost for the UK’s buyout market, coming a week after EQT AB agreed to buy UK veterinary drugmaker Dechra Pharmaceuticals Plc for £4.46 billion. These transactions bring some relief in a year that’s otherwise seen a dearth of cheap funding hit take privates, with potential deals for Scottish engineering group John Wood Group PLC and UK online retailer THG PLC collapsing.

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Abu Dhabi Commercial Bank, First Abu Dhabi Bank and Standard Chartered PLC are underwriting the debt being used to finance the Network International takeover, people with knowledge of the matter said. A representative for ADCB declined to comment, while spokespeople for FAB and Standard Chartered didn’t immediately respond to requests for comment.

Brookfield is an active investor in the Middle East, where it manages about US$8 billion in assets. The infrastructure specialist has also been relying heavily on cash-rich investors in the region when raising money for new funds.

Network International’s directors were advised by PJT Partners Inc., Citigroup Inc. and JPMorgan Chase & Co. Brookfield was advised by Morgan Stanley.

—With assistance from Claire Ruckin.

Bloomberg.com

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