Vantiv Inc., a major U.S. credit-card processor, has made an offer valuing U.K. payments group Worldpay Group Inc. at $10 billon, potentially beating out rival bidder J.P. Morgan Chase & Co.
Worldpay said in a statement Wednesday that it had agreed a deal in principle with Vantiv.
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The deal, if successful, would create a trans-Atlantic payments processing giant with a combined market value of more than $20 billion. The preliminary agreement still leaves space for J.P. Morgan to make a counterbid. Both parties have until Aug. 1 to make a firm offer.
Vantiv is offering a share and cash deal that would value Worldpay at about 19% of its closing share price before speculation of a deal began. Under the current merger on offer, Worldpay shareholders would own approximately 41% of the share capital of the two groups.
Worldpay is particularly strong in the U.K. and the U.S., processing millions of payments daily in stores, online and on mobile phones.
Ohio-based Vantiv helps merchants, banks and credit unions accept credit- and debit-card payments, as well as gift cards and online payments mainly in the U.S.
Payments businesses are under pressure to consolidate as regulators and rising competition from technology startups, squeeze the fees of incumbents. Worldpay rival Nets AS said last week that it had been approached by suitors. In April, Mastercard Inc. received regulatory approval to acquire payment-technology firm VocaLink Holdings Ltd. for about $920 million.
By Ben Dummett and Max Colchester