U.S. credit card payments processor Vantiv (>> Vantiv Inc) has finalised a deal to buy Britain's Worldpay (>> Worldpay Group) and the transaction is expected to be announced on Wednesday, sources with knowledge of the matter told Reuters.
Worldpay, Britain's biggest payments processor, said earlier on Tuesday that the deadline for the deal first announced on July 5 had been pushed back to Aug. 11 because the two companies needed more time to reach a final agreement.
In July, Vantiv offered 55 pence in cash, 0.0672 of a new Vantiv share and a 5 pence cash dividend for each Worldpay share, equivalent to 385 pence per share and valuing the British company at 7.7 billion pounds ($10 billion).
One of the sources said Vantiv has made some adjustments to the new governance structure but very little had changed in the composition of its cash and share offer for Worldpay, a former division of British lender Royal Bank of Scotland (>> Royal Bank of Scotland Group).
Payments firms have become targets for credit card companies and banks looking to capitalize on a switch from cash to payments by smartphones or other mobile devices and a Worldpay deal would be the latest in a string of acquisitions.
The new time limit announced on Tuesday was the second time the so-called put up or shut up deadline had been renegotiated.
The sources said that under the finalised terms Cincinnati-based Vantiv would not offer any binding commitment to protect existing jobs in Britain but London would play a dominant role as the international base of the combined entity.
The global headquarters of the new company will be in Cincinnati and it will have a primary listing in New York and a secondary one in London, the sources said.
A top 20 Worldpay shareholder told Reuters that Vantiv's initial plan to delist Worldpay from the London stock exchange had changed after objections from some Worldpay shareholders based in Britain who did not want U.S. stock.
The Worldpay investor also expressed some concern about the premium the deal would offer in the event of a merger deal.
Ahead of an announcement, the two companies have expanded their advisory teams. Barclays (>> Barclays) has come on board to help Worldpay alongside Goldman Sachs (>> Goldman Sachs Group) while Credit Suisse (>> Credit Suisse Group) is now working for Vantiv with Morgan Stanley (>> Morgan Stanley), the Wall Street bank that used to control the business.
Worldpay said its half-year results for the period ending June 30 would now be published on Wednesday and Vantiv's second-quarter results were also pushed back a day to coincide with the new release date.
Worldpay employs 4,500 people and says it processes about 31 million mobile, online and in-store transactions each day. It is facing a leadership change in Britain where the head of its UK division, Peter Jackson, will join gambling firm Paddy Power Betfair (>> Paddy Power Betfair PLC) as CEO.
While banks have been trying to develop and buy more sophisticated payments technology, companies such as PayPal (>> PayPal Holdings) and Worldpay have gained a large market share as consumers adopt online shopping and cashless transactions.
Worldpay and Vantiv were both spun out of their banks after the financial crisis and thrived on their home turf but are now part of a wave of payments company mergers around the world.
British firm Paysafe Group (>> Paysafe Group Plc) has backed a 3 billion pound takeover offer from a consortium managed by Blackstone (>> Blackstone Group LP) and CVC Capital Partners while London-based buyout fund Permira has taken a stake in payments company Klarna, one of Europe's most highly valued tech startups.
Danish payment services firm Nets A/S (>> Nets) has been approached by potential buyers in what could be another sizeable deal and French payments specialist Ingenico joined the rush with a 1.5 billion euro swoop on Swedish rival Bambora.
(Reporting by Pamela Barbaglia and Ben Martin; editing by David Clarke)
By Pamela Barbaglia and Ben Martin
Stocks treated in this article : Goldman Sachs Group
, Morgan Stanley
, Blackstone Group LP
, Paddy Power Betfair PLC
, Paysafe Group Plc
, Credit Suisse Group
, Vantiv Inc
, Royal Bank of Scotland Group
, PayPal Holdings
, Worldpay Group