06 July, 2017
Vantiv, a US -based payments processing and technology provider, and Worldpay, its counterpart in the United Kingdom, have reached "an agreement in principle on the key terms of a potential merger", reports Paybefore sister publication Banking Technology.
A spate of dealmaking news swept European stocks on Tuesday, with Worldpay soaring after bid approaches, helping mitigate a broad based pull back from the previous session's strong gains. The stock of Worldpay Group PLC (LON:WPG) earned "Overweight" rating by Morgan Stanley on Wednesday, January 6.
Worldpay shareholders would own about 41% of the combined group under the deal with Vantiv.
Payments offers high-octane growth for a company that already has leading shares in mature markets from deposits to institutional trading.
The companies said they will now proceed with mutual due diligence, with Vantiv reserving the right to make another offer for Worldpay.
Vantiv's Charles Drucker will become executive chairman and co-chief executive.
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Worldpay processes payment transactions in 146 countries and maintains a major hold over the processing market in Britain.
It said in a statement: "There can be no certainty either that an offer will be made nor as to the terms of any offer, if made".
JP Morgan's Chase Paymentech was third, followed by Bank of America and with Worldpay sixth.
FTSE 100-constituent Worldpay noted the merger terms come at a 19% premium to its closing share price on Monday, the day before the possible offer was revealed.
Vantiv's acquisition of Worldpay "fits in very nicely against this backdrop" said Beck, who outlined the logic of the deal in a February note. The total value of transactions handled by the company grew 14 percent to 14.9 billion pounds in 2016, while revenue increased 15 percent to 4.5 billion pounds and pretax profit rose to 264.1 million pounds. Four Worldpay directors will join the board of the new group, including Philip Jansen as co-chief executive and Sir Michael Rake, BT chairman and former Barclays deputy chairman, in a non-executive role.
Danish card payment services firm Nets A/S also said over the weekend it had been approached by potential buyers.
Set up in 1989, Worldpay was spun out of British bank Royal Bank of Scotland to private equity firms Bain Capital and Advent International in 2010.