* Strikes digital banking deal with unnamed financial institute
* Posts wider EBITDA loss for H1
* Shares jump as much as 16 pct (Adds Fiserv, TCS comments and share close)
By Noor Zainab Hussain
Feb 17 (Reuters) - British mobile-banking software maker Monitise Plc said it was in constructive discussions after putting itself up for sale last month, sending its shares up as much as 16 percent.
The company, which has a market value of about 534 million pounds ($820 million), said in January it received “a number of expressions of interest” as part of an “all encompassing” strategic review, including “corporate transactions and stock market listing options”.
Companies in three different sub-sectors might be interested in Monitise - card network providers, software vendors and system integrators, Jefferies analyst Milan Radia said.
Banking software vendors such as Fiserv Inc, FIS Global and Temenos Group could be interested, he said.
Radia also named India’s Tata Consultancy Services Ltd as a potential suitor, but said it was difficult to assess whether IBM’s heavy involvement with Monitise would deter another systems integrator. However, if Visa or MasterCard bought it, they could work with IBM, he said.
Monitise has tie-ups with IBM and MasterCard, which have been cited by some analysts as possible suitors.
Fiserv and TCS said they do not comment on market speculation, while Visa, MasterCard, FIS and Temenos did not immediately respond to requests for comment.
Monitise has two executives from Visa in its top leadership team. It hired former Visa executive Elizabeth Buse to co-run the company in June. Monitise Chairman Peter Ayliffe was earlier CEO of Visa Europe.
Radia said that to sell the business now would not make sense as Monetise could fetch a higher value in the future.
“I don’t necessarily feel that the end-game of this strategic review was to sell the business, and that has been made clear to me,” Radia, who has spoken to Monitise’s management, told Reuters.
Monitise said on Tuesday that it along with a partner had signed a letter of intent with a “major European financial institution” to deploy its digital banking capabilities in multiple countries.
“While there is little colour on who this is, it appears to be a company Monitise is already engaged with but is encouraging that it will deploy in Europe,” UBS analysts wrote in a note. They said the European expansion should provide some support to revenue growth.
Analyst Radia said the partner could be IBM.
Monitise said it would launch its central platform, built by IBM, in April. This is earlier than expected, according to Jefferies analysts.
Monitise reported a wider EBITDA loss for the six months ended Dec. 31, while revenue fell 8.8 percent to 42.4 million pounds ($65.1 million).
Monitise’s shares closed up 16 percent at 24.25 pence on the London Stock Exchange on Tuesday. ($1 = 0.6504 pounds) (Additional Reporting by Aashika Jain and Esha Vaish in Bengaluru; Editing by Gopakumar Warrier)