Payment solutions company WEX has backed out of the deal to buy Travelport’s eNett and virtual card issuer Optal, citing business conditions as a result of the coronavirus pandemic.

Travelport, eNett and Optal said they plan to hold WEX to the acquisition agreement.

In total, WEX would have paid $1.7 billion for both companies, with the majority of that ($1.28 billion in cash and 2 million in common shares) for eNett.

WEX talked about the decision in its first-quarter earnings release.

“The company has analyzed the eNett and Optal situation closely with specialist advisors and has concluded that the pandemic and conditions arising in connection with it have had, and continue to have, a material adverse effect on the business,” WEX said. “Because of this material adverse effect, WEX has advised eNett and Optal that it is not required to close the transaction persuant to the terms of the purchase agreement.”

Travelport and Optal objected to the decision. They argued in a statement that the purchase agreement was executed while Covid-19 was already spreading, on Jan. 24. 

The companies contend that the purchase agreement excluded the effects of a pandemic, as well as changes to laws or regulations including governmental travel restrictions, in its definition of “material adverse effect.”

“WEX therefore assumed all of these risks when it signed the purchase agreement,” they said.

“eNett, Travelport and Optal intend to vigorously enforce their contractual rights and to hold WEX to its promises under the purchase agreement,” they added. “eNett, Travelport and Optal expect WEX to perform its contractual obligations, including to finalize its financing, obtain the remaining governmental approvals, and close the transaction.”

eNett enables travel agencies to generate unique 16-digit Mastercard virtual account numbers, which are used to pay travel suppliers.

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