UPDATE 3-MasterCard to buy DataCash for $520 mln

* Offer price of 360p/share represents 54 pct premium

* MasterCard sees charge of about 5 cents a share in Q4

* DataCash shares rise 52.1 pct to 10-year high

* MasterCard looks for growth abroad, online
(Adds analyst comment, background, byline, NEW YORK dateline;
updates share move)

By Maria Aspan and Shivani Singh

NEW YORK/BANGALORE, Aug 19 (BestGrowthStock) – MasterCard Inc
(MA.N: ) said it would buy British payment services provider
DataCash Group Plc (DATA.L: ) for 333 million pounds ($520
million) in cash to expand its e-commerce business.

MasterCard, the world’s second-largest credit and debit
card payment processing network, said it would pay 360 pence
per share, a 54 percent premium to DataCash’s Wednesday closing
price.

MasterCard said the deal would increase its ability to
process payments online, especially in Europe and emerging
markets. DataCash helps merchants accept online payments and
provides them with fraud-prevention services.

MasterCard shares were down about 1 percent in premarket
trading Thursday. DataCash was up 52.1 percent at 356 pence on
the London Stock Exchange, reaching a 10-year high.

MasterCard’s new chief executive, Ajay Banga, is trying to
boost the company’s profits by developing its online and mobile
payments processing business. The company is looking for faster
growth in non-U.S. markets, where many consumers still use cash
instead of plastic or online payments.

Banga is also trying to catch up to arch-rival Visa Inc
(V.N: ), the world’s largest credit and debit card processing
network. In April, Visa signed a $2 billion deal to buy the
payment processor CyberSource Corp.

Signal Hill analyst Mayank Tandon said of the DataCash
deal, “This is clearly a smaller player in terms of size, but
they appear to have a very strong presence in Europe.”

“Visa has a stronger presence (in e-commerce) and they
bought the highest-quality asset in the space, but there’s a
long runway of growth here in the market,” he added.

Both Visa and MasterCard are trying to stay abreast of
competition with eBay Inc’s (EBAY.O: ) PayPal, which many
consumers think of first when they buy something online,
analysts said.

MasterCard expects the deal to reduce its fourth-quarter
earnings by about 5 cents per share, break even in 2011, and
add to earnings in 2012.

DataCash posted adjusted pretax profit of 16.6 million
pounds ($25.93 million) on turnover of 36.9 million pounds in
2009.

DataCash’s largest shareholder, Chairman Ashley Head, owns
a 43.3 percent stake in the company, according to the company’s
website. He stands to gain about 144 million pounds from the
MasterCard deal.

The acquisition is expected to close by the end of
October.

MasterCard shares closed at $212.86 on Wednesday on the New
York Stock Exchange.
($1=0.6402 pound)
(Reporting by Shivani Singh in Bangalore and Maria Aspan in
New York; Editing by Jarshad Kakkrakandy, Kavita Chandran and
John Wallace)

UPDATE 3-MasterCard to buy DataCash for $520 mln