The U.S. payment processing company Vantiv has agreed to buy Worldpay Group for 7.7 billion pounds ($9.9 billion), two years after the U.K. financial technology firm went public.
The cash-and-share offer equates to 3.85 pounds a share, including a 5 pence per share dividend, the companies said in a news release on Wednesday. JPMorgan Chase said it won’t make a bid after being invited to consider an offer.
Worldpay’s shares, which rose 28% Tuesday when Worldpay said it had gotten preliminary takeover approaches from Vantiv and JPMorgan, dropped 7.5% following the New York-based bank’s announcement. The stock traded at 376.7 pence at 1:30 p.m. in London.
The firm, whose products are used by small businesses to process payments from credit cards and via the internet, is part of a group of financial technology companies benefiting from customers who increasingly prefer to buy online. Danish payment services provider Nets A/S also said this week that it is reviewing options after receiving interest from potential buyers.
The boards of Worldpay and Vantiv “see compelling strategic, commercial and financial rationale” for the combination as well as “substantial opportunities for cost synergies,” and a combined company would have a strong position in the U.S., Europe, Asia-Pacific and South America, they said in the release.
The offer is about 21% above Worldpay’s closing share price on June 30, before bid speculation surfaced, excluding the dividend, the release said. Worldpay investors will receive 55 pence per share in cash and 0.0672 new Vantiv shares. After the deal, Worldpay shareholders will own about 41% of the combined companies.
JPMorgan was in the unusual position with Worldpay of being both its client’s broker and potential buyer. Corporate brokers, rarely seen outside of the U.K., advise clients and support their investor relationships for minimal fees in the expectation of winning more lucrative mandates on bigger deals, such as mergers or equity sales. Firms typically call their brokers to weigh in or provide defense when they receive a takeover approach.
Royal Bank of Scotland Group sold a majority stake in Worldpay, its payment-processing division, to Bain Capital and Advent International in 2010 to comply with European state aid rules after receiving a 45.5 billion-pound bailout from the U.K. government. The private-equity firms took the company public in October 2015 at 240 pence per share.
Vantiv also agreed to buy Atlanta-based Paymetric, a company that helps integrate electronic payments in corporate software systems, in April for an undisclosed amount and acquired Moneris Solutions for $429.6 million in December.