Worldpay shares slump 9 per cent after it agrees a £9.1bn deal with US credit card giant Vantiv

If it goes ahead, the deal would create a global payments giant with a combined market value of more than $20bn

Ben Chapman
Wednesday 05 July 2017 14:26 BST
The merger would value the UK’s largest payments provider at $10bn
The merger would value the UK’s largest payments provider at $10bn

Worldpay shares slumped almost 9 per cent on Wednesday after the UK payments company agreed preliminary terms on a multi-billion dollar merger deal with credit card giant Vantiv.

JPMorgan had also approached Worldpay, but said on Wednesday it would not make a formal offer.

If it goes ahead, the merger would value Worldpay, the UK’s largest payments provider, at £9.1bn and would create a global payments giant with a combined market value of more than $20bn (£15.5bn).

The announcement follows mounting speculation around a deal which saw Worldpay's shares spike 28 per cent on Tuesday.

In a statement on Wednesday, the two companies said they had identified "substantial opportunities for cost synergies, which support significant potential shareholder value creation".

The deal values Worldpay shares at £3.80 each plus a 5p dividend, a 20.7 per cent premium above their closing price on 29 June.

Under the terms of the potential merger, the ordinary shareholders of Worldpay would receive 55p per share plus 0.0672 new Vantiv shares, the companies said in a statement.

Worldpay provides businesses with the technology needed to process payments on cards, online or on mobile.

 Worldpay shares spiked after speculation mounted earlier this week that a takeover was being prepared 
 (Reuters Ikon)

US-focused Vantiv helps merchants and banks accept card and online payments.

Worldpay's current boss Philip Jansen would become co-chief executive of the enlarged group with Vantiv's Charles Drucker taking up the roles of executive chairman and co-chief executive.

Worldpay chairman Sir Michael Rake and his counterpart at Vantiv, Jeffrey Stiefler, will remain as non-executive directors.

Under takeover rules, Vantiv has until 1 August to make a firm offer.

As consumer behaviour changes and more people turn to mobile banking, ditching cash, established players are jostling to capitalise. A report published by consulting group Capgemini shows that the number of non-cash transactions rose 8.9 per cent in 2014 to reach 387.2 billion.

Worldpay dates back to 1989 when it was set up as a UK-based electronic payment provider that focused on point-of-sale transactions. It was spun out of the Royal Bank of Scotland in late 2010 and sold to private equity companies Bain Capital and Advent International.

Since then, the company has invested over £1bn in its business and has acquired several payment businesses and financial technology companies.

In 2015 its shares started trading on the FTSE 100 bluechip index. Last year it announced that it had invested in the ID verification startup Veridu.

The news comes as new figures on Wednesday revealed that venture capital firms pumped more than £1.1bn into the city’s technology sector over the last six months.

That means that London’s tech sector attracted more venture capital investment over that period than any other European city since the Brexit vote, including Dublin, Paris and Amsterdam. Over four times the amount of investment was recorded than at the same stage during 2013 and more than during any other six-month time period in the last decade, according to figures published by London & Partners, the Mayor of London’s promotional agency.

Investment across the whole of the UK topped £1.3bn.

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