Worldpay shares drop sharply after it agrees a £9.1 billion deal with Vantiv, but JPMorgan pulls out

LONDON – Payment processing firm Worldpay has agreed a preliminary deal to be taken over by payment processing giant Vantiv on Wednesday that values the company at £9.1 billion.

JPMorgan however, which had also approached Worldpay, says it will not make a formal offer.

“The boards of directors (the “Boards”) of Worldpay Group plc (“Worldpay”) and Vantiv, Inc. (“Vantiv”) are pleased to announce that they have reached an agreement in principle on the key terms of a potential merger of Worldpay and Vantiv (the “Potential Merger” to form the “Combined Group”),” a statement released to the London Stock Exchange said.

The deal comes less than a day after Worldpay confirmed separate takeover bids from JPMorgan Chase Bank and Vantiv.

Worldpay shares were up close to 5% in early trade following gains of nearly 25% on Tuesday, but have fallen sharply since the announcement, and are more than 11% lower as of 2.50 p.m. BST (9.50 a.m. ET) as investors sell out of the company on confirmation of a deal:

Screen Shot 2017 07 05 at 14.49.07

source
Investing.com

Shares are also being pushed lower after JPMorgan confirmed that it will not be making an offer for Worldpay, effectively ending any chance of a bidding war for the company.

Under the terms of the deal, Worldpay shareholders will receive £0.55 for every share they own, as well as 0.0672 new Vantiv shares.

The offer represents “a premium of approximately 18.9% to the closing Worldpay Share price on 3 July 2017,” the statement to the markets said.

Vantiv is being advised by Morgan Stanley on the deal, which will see Worldpay’s shares delisted from the FTSE 100. The company was initially listed two years ago and is a constituent of the FTSE 100 index. It provides payment services for point of sale transactions, and internet and mail order retailers.

Danish card payment services firm Nets A/S also said over the weekend it had been approached by potential buyers.