US rivals plot a takeover of UK payments giant

INVESTORS piled into Worldpay yesterday, adding £1.8bn to its value after bosses revealed the company was at the centre of a takeover battle.

The electronic payment firm said Wall Street giant JPMorgan and US payments rival Vantiv were both eyeing it up – potentially triggering a lucrative bidding war.

It even sparked speculation that tech giants such as Google might make rival offers.

Shares soared nearly 30pc as traders worked themselves into a frenzy at the news, valuing the business at a record £8.2bn. It is by far Worldpay’s biggest one-day rise and outstrips the total previous increase seen since it floated more than 18 months ago.

Hargreaves Lansdown analyst Laith Khalaf said: ‘The market is expecting a healthy premium for the company, partly because there are two potential suitors. That obviously creates a bit more of a competitive bidding dynamic than if there was just one.’

Worldpay was set up by NatWest in 1989, as credit and debit cards became increasingly popular across Britain.

In 2010, Brussels competition chiefs forced parent firm Royal Bank of Scotland to sell it as a condition of the lender’s £45bn government bailout.

The company was bought for £2bn by private equity firms Bain Capital and Advent International, which floated the company on the stock market in 2015.

Worldpay handles billions of transactions every year, earning profits from commissions when its technology is used at card terminals. The firm deals with more than 40pc of UK payments, and 5,000 staff work at its London headquarters.

It is particularly popular with small-and medium-sized companies such as pubs, restaurants and independent shops. A takeover would trigger big payouts for Worldpay bosses including 50-yearold chief executive Philip Jansen, who earned £2.6m last year.

He owns 7.5m shares outright worth around £30.6m at today’s prices, and has up to 1.4m more worth another £5.7m coming his way if he hits targets under various bonus schemes.

In total, these holdings jumped in value by £7.9m thanks to yesterday’s stock surge.

It was not clear yesterday how much JP Morgan and Vantiv might be prepared to offer for the business, although analysts at Cenkos said tech takeovers typically saw investors get a 30pc to 40pc premium. That could see an offer of up to £8.9bn or 447.3p per share.

Worldpay stock closed at 319.5p on the night before the bids were announced.

Analysts at global merchant bank Mediobanca said yesterday that more bidders could yet come out of the woodwork.

Under takeover rules, JPMorgan and Vantiv must now submit offers by 5pm on August 1 or declare they are not interested.

Worldpay shares soared 28pc, or 88.5p, to 408p yesterday.