Vantiv, Worldpay Agree to Merge -- WSJ
July 06 2017 - 3:02AM
Dow Jones News
By Ben Dummett and Max Colchester
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (July 6, 2017).
Vantiv Inc., appeared to ward off J.P. Morgan Chase & Co. in
the pursuit of U.K. payments processor a Worldpay Group PLC, saying
it had cinched a $10 billion takeover deal.
The proposed Vantiv-Worldpay combination, if successful, would
create a trans-Atlantic payments processing giant with a combined
market value of more than $20 billion. Vantiv has until Aug. 1 to
make a firm offer.
J.P. Morgan, which had been looking at Worldpay, said it was "at
a very early stage in considering" a bid but decided against the
move without providing a reason.
Payments businesses are under pressure to join forces in part to
cut costs as greater regulatory scrutiny and rising competition
from technology startups squeeze the fees of incumbents. Worldpay
rival Nets AS said last week it had been approached by suitors. In
April, Mastercard Inc. received regulatory approval to acquire
payment-technology firm VocaLink Holdings Ltd. for about $920
million.
Ohio-based Vantiv helps merchants, banks and credit unions
accept credit- and debit-card payments, as well as gift cards and
online payments mainly in the U.S. By acquiring Worldpay, Vantiv
would bolster its U.S. position and gain access to the U.K.,
markets where Worldpay processes millions of payments daily in
stores, online and on mobile phones.
Vantiv and Worldpay said they have identified "substantial"
opportunities for cost reductions, without disclosing how much or
where they are. They added that their talks remain ongoing, and
cautioned that there was no certainty any deal will be reached.
Vantiv is offering a share and cash deal that would value
Worldpay at about 19% above its closing share price before Worldpay
said Tuesday that it had received preliminary approaches from
Vantiv and J.P. Morgan. In London trading Wednesday, Worldpay was
down 8.6% at GBP3.73 ($4.83) after the stock had previously shot
above the ultimate offer price.
Under the terms of the possible deal, accepting Worldpay
shareholders would get 55 pence in cash and 0.0672 of a Vantiv
share for each share held -- giving them 41% of the combined group.
Shareholders would also receive a cash dividend of 5 pence a share
giving an overall value of GBP3.85 for each share held.
The combined group would be led by Vantiv's chief executive
officer, Charles Drucker, as executive chairman and co-chief
executive. Worldpay CEO Philip Jansen would be co-chief, the
companies said. Vantiv Chief Financial Officer Stephanie Ferris
would retain the same role.
Emily Glazer contributed to this article.
Write to Ben Dummett at ben.dummett@wsj.com and Max Colchester
at max.colchester@wsj.com
(END) Dow Jones Newswires
July 06, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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