Worldpay & Vantiv Reach Agreement In Principle On Merger Terms

Jul 06, 2017, 00:31
Worldpay & Vantiv Reach Agreement In Principle On Merger Terms

Britain's largest payment processing company is in takeover talks with both JPMorgan and US rival Vantiv.

Worldpay has seen its share price soar a huge 28% after announcing potential takeover bids from U.S. payments company Vantiv and finance giant JPMorgan.

Worldpay's share price had shot up another five per cent in trading on Wednesday morning following reports that Vantiv was close to agreeing a deal.

The agreement would see Worldpay shareholders receive 55 pence in cash and 0.0672 new Vantiv shares for each share they own. Worldpay shareholders will also get a cash dividend of 5 pence per share.

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The FTSE 100 edged six points higher to 7,363, led by Tesco (TSCO) which rose over 4% or 7p to almost 174p, after a boost by Booker (BOK), the wholesaler the supermarket is buying for £3.5 billion, which reported a 4.2% first quarter rise in like for like sales.

Vantiv will dominate the board with seven members, including Charles Drucker as executive chairman and co-chief executive.

Worldpay and Vantiv said in a joint statement that the merger would create a "world class payments group" and that there are "substantial opportunities" for cost synergies.

Worldpay said it had received preliminary approaches from each firm but that there was no certainty about a formal offer being made. The total value of transactions handled by the company grew 14 percent to 14.9 billion pounds in 2016, while revenue increased 15 percent to 4.5 billion pounds and pretax profit rose to 264.1 million pounds. "It will serve a wide range of customers, with a strong position in the four core regions of the US, Europe, Asia Pacific and South America". Vantiv Chief Financial Officer Stephanie Ferris, will remain CFO of the combined group.

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"In 2015 we floated on the London Stock Exchange and went straight into the FTSE 100".

Worldpay has agreed terms of a potential takeover by a larger United States rival.

Vantiv's acquisition of Worldpay "fits in very nicely against this backdrop" said Beck, who outlined the logic of the deal in a February note.

A trend may be appearing in regard to the payments space, with payment services company Nets A/S having also been approached at the weekend for a potential takeover.

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