LONDON, Oct 3 (Reuters Breakingviews) - Stricter regulation has been a headache for M&A in the tech industry. But it may do Prosus (PRX.AS) Chief Executive Bob van Dijk a favour. The $106 billion Amsterdam-listed investor on Monday said it has called off its $4.7 billion acquisition of payment firm BillDesk. Although the competition watchdog in India had approved the deal, “certain conditions precedent” weren’t met by the deadline at the end of last month, Prosus said.
One reason for the move may be the Indian central bank’s decision to mandate that all digital loans will have to be credited directly to borrowers’ bank accounts rather than through digital wallets, which may hurt fintech upstarts like BillDesk. And the deal, agreed in August last year, always looked pricey. At 19 times trailing sales, Prosus was paying a big premium to BillDesk’s global rival PayPal’s (PYPL.O) 13 times multiple at the time. Given the recent market slump, Prosus can now put its cash to work at lower valuations. Better still, it could buy back more shares, given its stock is now trading at a gaping 20% discount to the net value of its assets, according to Citigroup. (By Karen Kwok)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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