JPMorgan (JPM) And Vantiv In Race For Worldpay Takeover

The e-commerce business is fast growing with increasing number of consumers preferring to make payments using mobile phones and other electronic devices to cash transactions. Keeping this in mind, JPMorgan Chase & Co. (NYSE:JPM) and Vantiv, Inc. (NYSE:VNTV) , a credit card technology firm, have separately approached Worldpay Group Plc with preliminary takeover offers.

Worldpay, U.K’s largest payment-processing company, offers technology-led solutions to merchants and other businesses, which enable them to accept and settle payments made by their customers using mobile phones and other devices.

As increasing number of people have started avoiding cash transactions, the payment processing industry has started gaining importance. This has made banks, credit card companies and other technology firms target such payment servicers in order to take advantage of the growing need for digital and card payments.

Recently, there has been news of Nets A/S, a Danish payment services company, being targeted by potential buyers seeking to capitalize on this growing opportunity.

Worldpay, which received the bid offers on Tuesday, said that nothing has yet been finalized and that the deals are unsolicited. In fact, in order to comply with the U.K. takeover rules, both Vantiv and JPMorgan need to make up their mind and confirm by Aug 1 if they wish to buy Worldpay.

Per The Financial Times, people with knowledge of the matter said that the two bids are contrasting. While JPMorgan wants to buy Worldpay in cash, with a substantial premium to its pre-bid share price, Vantiv plans to go for a share-based merger at a relatively lower premium.

In 2010, The Royal Bank of Scotland Group (LON:RBS) plc (NYSE:RBS) sold around 80% of its stake in Worldpay to private equity firms — Bain Capital and Advent International. These firms, however, listed the company on the London Stock Exchange in 2015.

The Goldman Sachs Group, Inc. (NYSE:GS) is acting as an advisor for the deal.

Shares of JPMorgan have gained 54.1% in the last one year, outperforming the Zacks categorized Banks - Major Regional industry’s rally of 49.4%.



Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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