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UPDATE 2-UK mobile payments firm Monitise puts itself on the block
January 22, 2015 / 2:06 PM / 3 years ago

UPDATE 2-UK mobile payments firm Monitise puts itself on the block

* Hires Moelis & Co for “all encompassing” strategic review

* Company issues third revenue warning in a year

* Shares fall more than 20 pct (Adds details, comment from spokesman, updates shares)

By Richa Naidu and Noor Zainab Hussain

Jan 22 (Reuters) - British mobile banking software maker Monitise Plc has put itself up for sale, blaming changes in its business model for its third revenue warning in a year.

But shares of the former high-tech darling fell more than 20 percent amid doubts about whether it would find a buyer.

Monitise, which switched to a subscription model from one based on licences last year, said it had hired Moelis & Co to conduct an “all encompassing” strategic review that included “corporate transactions and stock market listing options.”

The company provides software for mobile devices that allows clients of banks including Royal Bank of Scotland and Banco Santander to pay for goods and services. The company has tie-ups with MasterCard Inc and IBM.

The future of Monitise and its rivals has been thrown into doubt, however, since Google Inc and Apple Inc launched free mobile payment systems.

At the stock’s low of 15.51 pence on Thursday, Monitise was valued at about 332 million pounds ($504 million).

Exane BNP Paribas analyst Alexandre Faure said a sale would be difficult, but MasterCard, or more likely IBM, could be interested.

IBM and MasterCard could not be reached for comment, while a spokesman for Monitise said takeover rules restricted the company from commenting beyond its statement. Moelis also declined to comment.

More than 62 million Monitise shares had changed hands by 1340 GMT, making the stock the most heavily traded on the London Stock Exchange.

The company, which had lost more than 70 percent of its value this year up to Wednesday, said it now expected revenue of $136 million-$151 million for the year ending June 30, compared with $143.7 million last year.

Even at the high end of the range, the company would miss its forecast of 25 percent revenue growth.

The company said it expected a full-year EBITDA loss of between $60 million and $76 million.

Analysts on average had expected a loss of just over $50 million, according to Thomson Reuters I/B/E/S.

Monitise shares were down 15 percent at 17 pence at 1355 GMT.

$1 = 0.6582 pounds Editing by Gopakumar Warrier and Ted Kerr

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