Worldpay, the UK payments processor, has reached a preliminary deal to be taken over by US rival Vantiv in a deal valuing the group at more than £9 billion.
Vantiv’s offer will see it pay 385p a share, or some £7.7bn, for the FTSE 100 fintech company, which at one time was owned by Royal Bank of Scotland. The US group will also pay £1.4bn to cover debts at the business.
In 2010, RBS sold off 80 per cent of Worldpay to private equity firms Advent International and Bain Capital for $3bn (£2bn) in a European Union-mandated divestment in return for the Scottish lender’s £45bn taxpayer bailout after the financial crash.
In 2013, RBS sold them the remaining 20 per cent stake, booking a profit of $259 million (£160m) in 2013. Worldpay later sealed the biggest flotation of 2015 when it listed on the London Stock Exchange with a valuation of £4.8bn.
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Vantiv’s bid has muscled out rival suitor JP Morgan Chase, which confirmed yesterday that it was pulling out of the takeover tussle.
WorldPay’s takeover will create a trans-Atlantic payments processing giant with a combined market value of more than $20bn.
Under the terms of the proposed deal, FTSE 100 firm Worldpay would delist from the London stock market, but would be run by two chief executives and have two headquarters – London and Vantiv’s base in Cincinnati, Ohio.
The enlarged group would be led by Worldpay’s current boss Philip Jansen as co-chief executive and Vantiv’s Charles Drucker as executive chairman and co-chief executive.
Shares in Worldpay closed down nearly 9 per cent at 372p yesterday after investment banking giant JP Morgan’s decision to bow out dashed investor hopes of a bidding battle. The stock had soared 27 per cent on Tuesday after it first revealed early stage takeover offers.
JP Morgan confirmed it had been at “a very early stage” in considering bidding for Worldpay, but decided not to make an offer.
“JP Morgan continues to hold Worldpay in high regard,” it added.
Worldpay has 400,000 global customers, and processes millions of payments daily in shops, online and mobile phones. The firms said the proposed deal “creates a scale world-class payments group in a dynamic market”.
Vantiv is largely focused on the US, helping merchants, banks and credit unions accept card payments. Talks are ongoing and the firms have until 1 August to firm up their approach, according to takeover rules.