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.
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)
