Worldpay unveils £9.1bn merger with U.S. rival Vantiv

06 July, 2017, 00:30 | Author: Celia Hoffman
  • FTSE 100 falls but Worldpay (LON:WPG) jumps

WORLDPAY Group Plc, Britain's largest payment processor, said yesterday that it had agreed to be bought by U.S. credit card technology firm Vantiv Inc in a deal valuing it at 7.7 billion pounds (US$9.95 billion).

The merger would value the UK's largest payments provider at $10bn and follows mounting speculation which saw Worldpay shares spike 28 per cent on Tuesday. Worldpay dropped 36 pence to £3.72, after news that it would sell for £3.85 per share, including stock, cash and a 5 pence dividend payment.

Following the merger, Worldpay shareholders would own 41 percent of the combined company.

Vantiv has offered to pay 385p a share for Worldpay, or £7.7bn, plus £1.4bn to cover debts.

"A combination with either Vantiv or JPMorgan would make sense in terms of the overlap of their businesses", said Martin O'Sullivan, an analyst at Cenkos Securities in London with a hold rating on Worldpay shares.

Vantiv's Charles Drucker will become executive chairman and co-chief executive.

The FTSE 100 eked out a small rise today as shares in Worldpay Group (WPG) plunged 9% after a bid battle for Britain's largest payment processor did not transpire.

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Other payments companies also gained, with Germany's Wirecard AG and France's Worldline SA climbing as much as 5.3 percent and 4.4 percent respectively.

Rival suitor JP Morgan Chase has withdrawn.

"The boards of Worldpay and Vantiv have identified substantial opportunities for cost synergies, which support significant potential shareholder value creation", Worldpay said.

The new entity will operate in "the four core regions of the U.S., Europe, Asia-Pacific and South America". Vantiv chief financial officer Stephanie Ferris would retain the same role.

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 United Kingdom float of 2015.

Danish card payment services firm Nets A/S also said over the weekend it had been approached by potential buyers.

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