Bosses cash in from £9bn tech takeover
THE bosses of payments giant Worldpay could walk away with more than £90m if a £9.1bn takeover bid by US rival Vantiv is forced through.
Vantiv’s offer will see it pay 385p a share for Worldpay, or £7.7bn, plus £1.4bn to cover debts.
The proposal was greeted by Worldpay directors with open arms yesterday – but the firm’s share price slumped as traders’ hopes of a bidding war were dashed.
News of a possible takeover broke on Tuesday when the firm revealed it had attracted interest from Vantiv and Wall Street bank JP Morgan.
Some analysts suggested that tech behemoths such as Google might also wade in. But JP Morgan yesterday walked away and no other suitors are thought to have emerged.
Vantiv’s cash-and-shares offer failed to match traders’ surging expectations after they were whipped into a frenzy with earlier talk of a lucrative fight.
‘The market was expecting a bigger premium, which may have been down to the fact there were originally two parties circling,’ said Hargreaves Lansdown analyst Laith Khalaf.
The deal is a kick in the teeth for beleaguered Royal Bank of Scotland, which owned Worldpay until 2010.
RBS was forced to sell it for just £2bn by Brussels competition authorities as a condition of the £45bn bailout which saved the bank from collapse.
Worldpay handled 15bn transactions last year. The firm’s profits come from commissions when its technology is used at card terminals.
It deals with more than 40pc of UK payments, and 5,000 staff work at its London headquarters. Worldpay is particularly popular with small and medium sized companies.
Despite the souring of investor sentiment, board members will enjoy a £91.3m bonanza if the takeover goes ahead.
Chief executive Philip Jansen could pocket up to £34.3m if the deal goes through, thanks to a combination of shares he owns and others coming his way if he hits various bonus targets. Finance chief Rick Medlock would trouser up to £23.4m, and vice chairman Ron Kalifa would get up to £24.7m. Non-executives would also do well, with John Allan – who is also the chairman of Tesco – in line for £7.3m.
Worldpay’s chairman Sir Mike Rake, who also chairs BT, would get around £321,000.
Investors are being offered 55p in cash, plus 0.0672 shares in Van- tiv, for every Worldpay share. It works out at 385p per share – 18.9pc more than the closing price before a possible takeover was announced – but far below what traders had hoped for.
On Tuesday, stock rocketed by 28pc but fter JP Morgan ruled itself out yesterday, it slumped 8.8pc or 36p to 372p – significantly below Vantiv’s offer price.
The bidder has support from the Worldpay board, but it will need to secure the backing of shareholders and competition authorities. Given Vantiv’s position as the chief US payments handler – dealing with 20.1bn transactions a year – and Worldpay’s similar prominence in Britain, there is no guarantee the tieup will sail through.
There could also be opposition to yet another British FTSE 100 firm being gobbled up by a foreign predator.