Financial Services

Worldpay agrees merger deal with US rival Vantiv

Move values British payments processing firm at €10.4 billion

The deal between Vantiv and Worldpay will see the newly-combined group run by two chief executives and co-headquartered between London and Cincinnati.

Wed Jul 5 2017 - 13:33

Worldpay Group, the UK's leading payments processor, has reached a preliminary agreement to combine with its US rival Vantiv in a deal that values the British group at £9.1 billion (€10.4 billion) including debt.

Vantiv’s offer is predominantly share-based and values Worldpay shares at 385p each, including the payment of a 5p dividend.

The deal will also see the newly-combined group run by two chief executives and co-headquartered between London and Cincinnati, where Vantiv is based.

Charles Drucker, who leads Vantiv, will become co-chief executive alongside Worldpay’s head Philip Jansen during a transition period. Mr Drucker will also become executive chairman of the board and over time Mr Jansen could take full charge of the company. A new board of directors would consist of four directors from Worldpay and seven from Vantiv.

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Worldpay shareholders would own roughly 41 per cent of the combined group. The offer price values Worldpay at a 19 per cent premium to its closing price before news of potential interest leaked into the market. Worldpay investors would receive 55p in cash and the remainder in Vantiv shares at a ratio of 0.0672 to each Worldpay share they hold.

The agreement comes less than a day after Worldpay revealed that it had been approached by both Vantiv and JPMorgan Chase, the world’s largest bank by market value, though the the latter is interested in a cash takeover of the UK company.

Shares in Worldpay have soared in the last two trading days, driven by expectations that there will be a bidding war for the company from JPMorgan as well as other payments rivals such as Global Payments. Worldpay shares had risen 4 per cent to 424p in early London trading before the announcement, having climbed 27.7 per cent on Tuesday.

Worldpay also has net debt of £1.4 billion. That means the deal values Worldpay’s equity at £7.7 billion, far below the level its stock is currently trading at on Wednesday.

Both JPMorgan and Vantiv are interested in Worldpay’s operations in Europe, where it is a leader in providing the technology that allows businesses to accept card payments and online transactions from customers. – (Copyright The Financial Times Limited 2017)

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