* Strikes digital banking deal with unnamed financialinstitute
* Posts wider EBITDA loss for H1
* Shares jump as much as 16 pct (Adds Fiserv, TCS comments and share close)
By Noor Zainab Hussain
Feb 17 (Reuters) - British mobile-banking software makerMonitise Plc said it was in constructive discussionsafter putting itself up for sale last month, sending its sharesup as much as 16 percent.
The company, which has a market value of about 534 millionpounds ($820 million), said in January it received "a number ofexpressions of interest" as part of an "all encompassing"strategic review, including "corporate transactions and stockmarket listing options".
Companies in three different sub-sectors might be interestedin Monitise - card network providers, software vendors andsystem integrators, Jefferies analyst Milan Radia said.
Banking software vendors such as Fiserv Inc, FISGlobal and Temenos Group could be interested,he said.
Radia also named India's Tata Consultancy Services Ltd as a potential suitor, but said it was difficult toassess whether IBM's heavy involvement with Monitise would deteranother systems integrator. However, if Visa or MasterCardbought it, they could work with IBM, he said.
Monitise has tie-ups with IBM and MasterCard,which have been cited by some analysts as possible suitors.
Fiserv and TCS said they do not comment on marketspeculation, while Visa, MasterCard, FIS and Temenos did notimmediately respond to requests for comment.
Monitise has two executives from Visa in its top leadershipteam. It hired former Visa executive Elizabeth Buse to co-runthe company in June. Monitise Chairman Peter Ayliffe was earlierCEO of Visa Europe.
Radia said that to sell the business now would not makesense as Monetise could fetch a higher value in the future.
"I don't necessarily feel that the end-game of thisstrategic review was to sell the business, and that has beenmade clear to me," Radia, who has spoken to Monitise'smanagement, told Reuters.
Monitise said on Tuesday that it along with a partner hadsigned a letter of intent with a "major European financialinstitution" to deploy its digital banking capabilities inmultiple countries.
"While there is little colour on who this is, it appears tobe a company Monitise is already engaged with but is encouragingthat it will deploy in Europe," UBS analysts wrote in a note.They said the European expansion should provide some support torevenue growth.
Analyst Radia said the partner could be IBM.
Monitise said it would launch its central platform, built byIBM, in April. This is earlier than expected, according toJefferies analysts.
Monitise reported a wider EBITDA loss for the six monthsended Dec. 31, while revenue fell 8.8 percent to 42.4 millionpounds ($65.1 million).
Monitise's shares closed up 16 percent at 24.25 pence on theLondon Stock Exchange on Tuesday. ($1 = 0.6504 pounds) (Additional Reporting by Aashika Jain and Esha Vaish inBengaluru; Editing by Gopakumar Warrier)
