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Vantiv goes global with $10-billion Worldpay buy

Payment firms targets for credit card companies, banks to capitalise on cash to digital transactions

Noor Zainab Hussain | Reuters 

Vantiv, a credit card processor

agreed to buy Britain's for 7.7 billion euros ($10 billion) on Wednesday in a move expected to trigger further deals.

Payments companies have become targets for credit card companies and seeking to capitalise on a switch from cash transactions to paying by smartphone or other mobile device, with Danish payment services firm Nets A/S revealing it had been approached by potential buyers.

in rose by nearly 28 per cent on Tuesday when Britain's largest payments firm said it had received approaches from both and JPMorgan, which is Worldpay's corporate broker.

The bank said that while it had shown a preliminary interest, it does not plan to make a rival bid.

"Given the current price, strategic rationale for and lack of significant (earnings per share) accretion we believe it is unlikely other suitors will emerge at this point," analysts at Cowen said following the announcement of the deal.

Under the terms revealed on Wednesday, will pay 55 pence in cash, 0.0672 of a new share and a 5 pence cash dividend per share, totalling 385 pence per share.

Although this is an 18.9 per cent to Worldpay's closing share price on Monday, it is below the 409.5 pence hit on Wednesday before the announcement, which comes only 20 months after listed in London with a 4.8 billion pound price tag.

Worldpay's stock was down 9.3 per cent at 370 pence at 1425 GMT while Vantiv, which has a of $12.3 billion, saw its fall 3.9 per cent to $60.51.

Shareholders in the British firm will own about 41 per cent of the new company, which will be run by Chief Charles Drucker and CEO Philip Jansen.

Set up in 1989, London-based was spun out of Royal Bank of Scotland to private equity firms Bain Capital and Advent in 2010. 

The firm employs 4,500 people, and says it processes around 31 million mobile, online and in-store transactions every day.

While have been trying to develop and buy more sophisticated technology, companies like and have gained a large market share as consumers have adopted online shopping and cashless transactions.

Analysts say the most likely target is Worldpay's e-commerce business, especially outside the United States where is largely focused. says it supports 400,000 merchants in 126 currencies across 146 countries.

"While owns one of the most enviable acquiring businesses - over 30 per cent  of revenue from integrated channels - it has no exposure outside of North America," Cowen analysts said.

Worldpay's e-commerce payments revenue, which accounts for more than a third of its total, rose by 21.7 per cent to 386.6 million pounds in 2016, driven by new business wins and strength in its global retail and digital content units.

Analysts at Berenberg said before the announcement that - as well as JP Morgan, is suffering from excessive exposure to the offline market.

"The acquisition of would give them e-commerce capabilities that they would be able to cross-sell to their client base."


Increased exposure to the United States would also help Worldpay, which reported a lower than expected rise in 2016 revenue, hurt by weakness in its American business which accounts for more than a quarter of its revenue.

"would gain scale in the market, a geography where frankly the company has floundered relative to rivals," Cowen analysts said.


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