As Worldpay executives mull over a potential IPO, payments processor Ingenico looks to put a spanner in the works by offering well over £6 billion in a fresh takeover bid, with the French company including a break fee in case the deal falls through.
Is a payments ‘super group’ on the cards?
According to Sky News, Ingenico submitted a revised bid to Worldpay earlier this week, with the new terms including a cash-only deal which includes a break fee giving Advent International and Bain Capital, Worldpay’s parent companies, greater peace of mind if they eventually decide to sell their company.
Igenico hope to purchase its rival in order to create a combined payments company worth well over £11bn, only after receiving approval from its shareholders.
Reports last week suggested that Igenico has received backing from multiple financial institutions, including HSBC, Natixis and Societe Generale in regards to its takeover bid.
Beating the competition
Igenico has to jump through several hoops if they want to secure a takeover, with a rival payments firm submitting an offer in August, as well as hoping that Bain and Advent decide not to list their company on the London Stock Exchange.
Bain and Advent bought Worldpay from Royal Bank of Scotland Plc for £1.7 billion in 2010. Founded in 1997, the company boasts the likes of Google and Sony as corporate customers.
In late August, Payment Eye reported that Wirecard was planning a $9.4 billion bid for the British firm in a cash-plus-stocks agreement.
Private equity firms Blackstone Group and Hellman & Friedman are also rumoured to be considering a bid for the payments group, which produced a 13 per cent rise in pre-tax earnings, currently standing at £182.6m.
If a takeover deal fails to materialise, it is likely that Bain and Advent will decide to launch an IPO, with the processors being valued at £6 billion ($9.4 billion), which is 17 times more than its projected earnings.
‘Continued investment in technology’
Inside their corporate offices, it’s business as usual for Worldpay executives, with Philip Jansen, Worldpay’s chief executive stating that the firms recent financial results displays an ‘‘ongoing focus on investing in technology and building our business, developing new and innovative products and meeting the evolving needs of our customers to help them prosper.’’
‘‘Our continued investment in technology and customer service is complemented by a number of new and exciting products launched during 2015. Combined with Worldpay’s global reach and capability this creates significant opportunities to continue to grow our business,’’ continued Jansen.
Worldpay has recently made some important changes to its managerial structure. Sir Michael Rake, former Barclays Plc deputy chairman, has joined the payment processor as its new chairman in order to assist with the firms potential IPO.
This is not the only takeover bid that Worldpay has to focus on. The British company owns a large stake in Visa Europe, so will presumably be keeping one eye on a potential acquisition by Visa.
There’s more signs of consolidation in the crowded European payments space with news that Stockholm-based iZettle is buying a company called intelligentpos.
MasterCard has bought Vocalink for £700m ($920m) in a deal that has been rumoured for months.
Oh, what we wouldn't do to know the future! Like Biff and the Almanac in Back to the Future, all we need is a guide. Luckily the team over at Pivotl is on hand to give us one for the future of fintech.
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