Paysafe takeover on the cards after £2.9bn private equity overture

SHARES in Paysafe soared after the card processing group said it had received a multi-billion pound offer from two private equity giants.

The FTSE 250 company has been turning down bids from a group of investors, including Blackstone and CVC Capital Partners, since early May but on Friday said it was considering an offer of 590p a share, valuing it at £2.9bn. The revised bid – which marks a 34pc premium on Paysafe’s average price for the six months to June – sent the group’s shares up 6.8pc to a record high.

Interest in the business follows a wave of consolidation in the sector, with payment firms seen as prime takeover targets as a rising number of people pay for things electronically instead of with cash. Britain’s largest payments processor, Worldpay, agreed to a deal with US credit card technology outfit Vantiv earlier this month, while Danish payments firm Nets said it was reviewing its options after being approached by a number of potential buyers.

“If you roll the clock forward a decade or so you’d expect [this sector] to be dominated by a few large-scale players,” said Imran Gulamhuseinwala, EY’S global head of financial technology. “There is an emerging group of payment winners, which are growing quickly.”

Blackstone and CVC have until Aug 18 to confirm their bid for Paysafe, with others able to put in a rival offer until that point. Old Mutual Global Investors, the company’s largest shareholder, has publicly supported the takeover. Paysafe, which only joined the FTSE 250 index last year, has seen its revenues rocket 600pc since 2011 – a chunk of which comes from handling gambling transactions for companies such as Ladbrokes.

The takeover offer came on the same day that Paysafe sealed a $470m (£362m) deal with US rival Merchants Choice, a payment processor based in Texas.

It is little surprise that there has been a deal frenzy in the sector this year – a recent study by ING bank showed that more than a third of Europeans would only pay for things electronically if they had the choice, with 78pc of those surveyed saying they use cash less than they did just a year ago.

London-based coffee shop Browns of Brockley stopped accepting cash earlier this year, with Ross Brown, its owner, saying only 30pc of customers used to pay with notes or coins.