Worldpay has agreed a £9.1bn deal to be acquired by US rival Vantiv, sending shares in the company down sharply.
Worldpay fell close to 10% to £3.68, soon after unveiling Vantiv’s planned takeover of the business, which values its shares at £3.85. Shares in Worldpay had climbed to as high as £4.35 amid expectations that a bidding war would ensue between Vantiv and JPMorgan Chase, both of whom were revealed to be competing to buy the company on Tuesday.
But JPMorgan ruled itself out from making a bid within an hour of the announcement of the deal between the two payments groups. The bank, which had faced criticism since it is also a corporate broker to Worldpay, said it had approached the UK company “in response to an invitation” and that it would not make a firm offer.
Under UK takeover rules, JPMorgan cannot now approach Worldpay for six months. Vantiv, which has grown rapidly by striking deals across the US, is looking to gain a foothold in Europe where Worldpay is a leader in providing the technology that allows businesses to accept card payments and online transactions from customers.
Vantiv is interested in Worldpay’s operations in Europe, as a shift in consumer habits away from using cash to digital and card payments has helped bolster demand for payment processors.
By acquiring or merging with a rival payment processor, companies can seek huge cost savings from cutting redundant technology and costs. They can also consolidate information about individual customers across different geographies, allowing them to provide more added value services to large corporations and retailers.