United Kingdom payment processing firm close to takeover by U.S. rival

United Kingdom payment processing firm close to takeover by U.S. rival

United Kingdom payment processing firm close to takeover by U.S. rival

JPMorgan Chase & Co said Wednesday it does not intend to make a competing offer for Worldpay Group Inc, after the London-listed payment processor reached initial merger terms with Vantiv Inc.

Worldpay, which sells technology to businesses so they can take payments via cards, online or on mobile devices, said the approaches were preliminary and there was no certainty any deal would be made.

The announcement follows Worldpay's confirmation Tuesday that it had been in takeover talks with both Cleveland-based Vantiv and JPMorgan, news that boosted their stock 28 percent.

Under the terms of the offer, Worldpay shareholders would own about 41 percent of the share capital of the combined company. Shareholders would also receive a cash dividend of 5 pence a share giving an overall value of GBP3.85 ($4.98) for each share held. The firm's market capitalization is GBX 8.11 billion.

Worldpay now processes around 31m mobile, online and in-store transactions every day, and is a major competitor against the likes of Square, Stripe and PayPal.

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Despite the jump in Worldpay shares, the FTSE 100 index was down 31.25 points at 7,345.84.

The U.S. banking giant has made an early approach for United Kingdom -based Worldpay, the target company said on Tuesday.

Wall Street Wires cited unnamed City sources as suggesting Worldpay had been approached by suitors.

Analysts suggested Worldpay could fetch up to 450p per share, nearly double the 2015 IPO price, valuing it at £9 billion. The company says that its business will cover the US, Europe, Asia-Pacific and South America, "including numerous world's largest e-commerce merchants, and a substantial base of merchants of all sizes in Europe and the US". The total value of transactions handled by the company grew 14 percent to 14.9 billion pounds in 2016, while revenue increased 15 percent to 4.5 billion pounds and pretax profit rose to 264.1 million pounds. Vantiv chief financial officer Stephanie Ferris would retain the same role.

- Worldpay is being advised on its deal with Vantiv by Goldman Sachs. Its rival Nets confirmed on Monday it had been approached by potential buyers.

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