By Justina Vasquez
Vantiv Inc. agreed to buy nearly 20 million of its shares from former parent Fifth Third Bancorp for roughly $1.27 billion in a move that allows the payments-processing firm to avoid stock dilution ahead of its planned acquisition of the U.K.'s Worldpay Group PLC.
Fifth Third exercised warrants of Class B shares it held in Vantiv last week, converting them into 19.79 million of Class A stock. Vantiv said Tuesday it reached a deal with the Cincinnati bank to buy and then cancel the shares.
Fifth Third spun off Vantiv, formerly named Fifth Third Processing Solutions, as a separate company in 2009. The bank has been steadily shrinking its position in Vantiv in recent years.
Vantiv that following this share purchase, Fifth Third's remaining director would resign from the company's board.
Vantiv and Worldpay also announced that talks on their planned tie-up are continuing, about one month after Vantiv announced a $10 billion plan to takeover Worldpay.
Fifth Third will hold about a 4.9% stake in Vantiv if the purchase of Worldpay closes.