Worldpay, Britain’s largest payments processor, has accepted a £7.7bn takeover offer from US rival Vantiv just 24 hours after the talks first emerged, reports The Telegraph.
Shares in the FTSE 100 company slid on Wednesday after it agreed to a deal with the Ohio-based credit card processor, a day after news of the talks with Vantiv and JP Morgan Chase sent its shares soaring 28 per cent.
The payment giant unveiled terms of a potential merger with Vantiv on Wednesday in a cash and paper offer that values the group at 385p a share, or £7.7bn, based on the US firm’s share price on Tuesday. Including debt, the deal has an enterprise value of £9.1bn.
JP Morgan quickly responded to the news by saying that it did not intend to make an offer for the firm and had been at a very early stages of considering a deal “in response to an invitation from Worldpay”.
Under the Vantiv offer, Worldpay chief executive Philip Jansen – who told The Telegraph in March that the US market would be a key focus in the next two years – will become co-CEO of the combined group alongside Vantiv boss Charles Drucker.
A merger with Vantiv – which last year agreed to buy Canadian payments firm Moneris Solutions and in April signed a deal with US payment technology outfit Paymetric – could be a major boost for Worldpay in the US, where it has a relatively small presence and where it changed its chief executive twice last year.
The move comes just two years after Worldpay listed in London with a value of £4.8bn – it is now valued at over £8bn – in what was the largest UK float of 2015. It was snapped up by Bain Capital and Advent in 2010 after the Royal Bank of Scotland had to sell off the division as consequence of its Government bailout in 2008.
Analysts said on Tuesday – before terms of a deal with Vantiv emerged – that news of the talks was likely to trigger a bidding war for the payments processor, which is behind around 400 payments a second each day. It is still a possibility that others could swoop in.
Mediobanca analyst Robin Vandenbroek said technology titans such as Google, Amazon and Apple could table a larger offer given that the group has data on what almost half of the UK population (42pc) buys. It claims that more than 16,000 hairdressers, 24,000 restaurants and 9,000 pubs in Britain use its technology.
Payment firms are viewed as prime takeover targets given the growing number of people paying for things electronically instead of with cash.
Danish payments firm Nets, for example, confirmed it had been approached by potential buyers over the weekend and was “reviewing its options”.
If the Vantiv deal goes ahead Worldpay’s shareholders would own approximately 41pc of the combined group. Its shares would also be delisted from the FTSE 100.