Worldpay Group share price hits record high as investors lap up rival takeover interest from JP Morgan and Vantiv

 
Lynsey Barber
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JP Morgan and Vantiv have approached WorldPay over the possibility of a takeover, sending shares in the the FTSE 100 payments firm rocketing as much as 30 per cent.

Shares were trading at an all-time high of 413.40 pence per share in morning trading.

The preliminary approaches from the rival bidders for the more than £7bn-valued financial technology company were confirmed after speculation that it was a target had already sent shares surging in early trading on Tuesday morning.

Worldpay said in an update to the market: "There can be no certainty either that an offer will be made nor as to the terms of any offer, if made. A further announcement will be made if appropriate.”

Vantiv is a US payments processing company listed on the New York Stock Exchange with a $12bn market capitalisation.

The firms have until 1 August to clarify their intentions under UK takeover rules -either making an offer or walking away.

A takeover of Worldpay would be bad for the UK’s leading share index, one analyst said.

Chris Beauchamp, a market analyst at IG said its departure would be a “step backwards” for the FTSE 100. “The firm was a welcome addition to an index that had become overpopulated by banks and miners, although I'm not entirely sure many ordinary investors even noticed it was there,” he said.

Significant shareholders which stand to benefit from any deal include Blackrock, Aviva, Abu Dhabi Investments and Canada Pension Plan.

The swoop for Worldpay is the latest in the increasingly active world of payments and financial technology and software more widely.

Financial technology deals

The approach for Worldpay follows hot on the heels of a bid for Denmark's Nets.

It confirmed over the weekend it had been approached about a takeover after shares surged nearly 14 per cent. The payments firm went public last year on the Danish stock exchange.

“It is very early stage and there can be no certainty as to the potential outcome,” it said in an update to investors. Apple and Paypal approached the company, according to LCG analyst Ipek Ozkardeskaya.

Nets was floated last year by private equity owners Advent International and Bain Capital (previously owners of Worldpay, see timeline below) at a 30bn kroner valuation, in one of the biggest European listings of 2016.

UBS analysts notes another big deal in this space: Global Payments' $3.8bn acquisition of Heartland Payment Sytems in December 2015 in the US.

  • Ant Financial, the spin of finance company of China tech giant Alibaba, sparked a bidding war for US money transfer company Moneygram. It eventually beat US firm Euronet with a bid of more than $1bn.
  • Former star fintech Monitise was last month snapped up for £70m by US giant Fiserv, though at a significantly lower price than the Aim-listed firm has previously been valued at after a string of profit warnings.
  • Misys was expected to make a return to the London Stock Exchange in a much anticipated IPO. However, that has not been forthcoming due to market conditions and private equity owners Vista merged it with another newly acquired firm in its portfolio, Canada’s DH corporation, in recent weeks.

The potential deal has sent shares of Nets up two per cent and Wirecard, a German competitor soaring more than seven per cent. And shares in FTSE 250 firm Paysafe were up more than three per cent in morning trading.

Timeline: A history of Worldpay

2010

Royal Bank of Scotland sells a majority stake in Worldpay to private equity firms Advent International and Bain Capital for £3bn. The taxpayer-owned bank was forced to hive off the payments processor by EU regulators as part of the bailout

2013

RBS sells its remaining 20 per cent stake to the private equity firms for £160m

2015

Several potential buyers were reportedly in the frame for a buyout as it prepared for a public listing. JP Morgan were among the names connected to Worlpay then, along with several other buyout firms. It eventually went public on the London Stock Exchange, giving it a market cap of £5.28bn in the biggest float of the year.

2017

JP Morgan and Vantiv make an approach about a potential merger.

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