Fintech
JPMorgan and Greek fintech get roadmap to overcome controversy
A London court on Thursday explained in detail how Greek fintech works Viva Wallet must be valued — a development that could prompt its sale after revaluation.
It might even help iron out the differences which prompted JPMorgan Chase, which owns a 48.5% stake in Viva, and Haris Karonis’ WRL, which owns 51.5%, to sue each other.
Karonis claimed in court documents filed earlier this year that Viva was blocked from entering the U.S. and some European markets in an effort to keep its valuation low. Karonis also argues that JPMorgan’s payments business could compete with Viva in some markets, according to a February report published in Financial Times.
JP Morgan bought its stake in Viva in 2022 for around €800 million and, under the terms of that deal, the bank could take full control of Viva if it is valued at less than €5 billion by July 2025.
At last count, there was a €2 billion gap between Viva’s value in the eyes of its own valuer, EY, and that figure seen by JPMorgan’s valuer, Houlihan Lokey. But neither comes close to 5 billion euros. The first estimated Viva at 3 billion euros; the latter, at 1 billion euros.
“As the founder of this company, I am thrilled that Viva will now be appropriately valued based on its growth strategy in the United States, reflecting its fair market value,” Karonis said in a statement seen on Thursday by Reuters.
Karonis previously said the 2022 deal creates “perverse incentives” for JPMorgan to limit Viva’s growth.
The London judge on Thursday confirmed that Viva is subject to US legal restrictions, but rejected suggestions that JPMorgan had an incentive to depress the fintech’s value.
JPMorgan’s lawyers, in an expedited trial this year, said WRL “invented a dispute” over the valuation to pressure the bank to renegotiate the deal, according to Bloomberg.
The bank, meanwhile, noted that fintech valuations have plummeted since the 2022 deal was signed.
JPMorgan also called Thursday’s ruling a “great achievement.”
“With a financial stake in the company, we have repeatedly offered ways to help it expand and succeed,” a spokesperson for the bank told Reuters. “The court has now provided a key step to move forward with fair and transparent valuations, which could enable the sale of Viva shortly, before the fintech mergers and acquisitions market weakens further.”
The JPMorgan payments executive is widely credited as the architect of the Viva deal, Takis Georgakopoulosannounced this month that he will be leaving the bank to “pursue an opportunity outside the company.”
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