FireOne Purchase Offered by Parent Company

FireOne, provider of the payment processing service, FirePay, has received an offer to be purchased by its parent company, Optimal Group, Inc. The offer is for 60 pence per share, a premium of approximately 12 percent over FireOne’s closing price on Thursday.

The buyout offer is a result of FireOne’s loss of business since electing to not service U.S. customers after the UIGEA was passed in America in October.

In the offer, Optimal stated why it was looking to do something with FireOne:

“The passing of the Act has had a material negative impact on the prospects for the business and operations of FireOne. In light of these changes in the legislative environment, the Board has conducted a review of FireOne’s business and considered a range of strategic alternatives, and the potential returns available from each option to FireOne Shareholders, including, liquidation of the business; returning excess cash to FireOne Shareholders; continuing the business as an independent entity, focusing on non-U.S. gaming and nongaming processing assets (and making suitable acquisitions in these areas); and a sale of the FireOne business.”

The initial summary concludes with Optimal’s reason for the purchase:

“The Independent Directors believe that FireOne’s future as an independent listed entity is uncertain and that, as a wholly owned entity within the OGI Group, the resulting operational synergies and benefits of scale would offer the opportunity for improved performance relative to management’s current expectations for FireOne.”

Optimal shares were up 2 percent midday, while FireOne’s stock price soared 20 percent.

Originally published December 15, 2006