Worldpay share price dips as group strikes takeover deal with Vantiv

on Jul 5, 2017

Shares in Worldpay (LON:WPG) have slipped into the red in today’s session, as the London-listed payments processor agreed a £7.7-billion takeover deal with US credit card technology company Vantiv. The news comes after the UK group confirmed yesterday that it had received preliminary approaches from the US company and JPMorgan.

As of 14:26 BST, Worldpay’s share price had lost 9.80 percent to stand at 368.00p. Today’s decline comes after the shares soared 27.70 percent yesterday.
Worldpay announced in a statement today that it had agreed in principle on the key terms of a potential cash-and-share merger with Vantiv. The deal values the UK group at 385p per share or £7.7 billion. Following the merger, the FTSE 100 company’s shareholders would own approximately 41 percent of the share capital of the enlarged group on a fully diluted basis.

The companies said in the statement that their boards saw “compelling strategic, commercial and financial rationale for combining Worldpay and Vantiv’s complementary businesses”. Reuters meanwhile noted in its coverage of the news that the deal is seen by analysts as the start of a trend for consolidation in the payments industry, with payment companies having become attractive targets for credit card companies, banks and technology firms seeking to capitalise on the decline in cash transactions and growth in popularity of paying by smartphone or other mobile devices.
Worldpay, which floated in London less than two years ago, will delist from the LSE, while Vantiv, which will be the ultimate holding company, will continue to be listed on the New York Stock Exchange. The FTSE 100 company was set up in 1989, and was spun out of Royal Bank of Scotland Group (LON:RBS) in 2010, following the blue-chip lender’s taxpayer-funded bailout.