The boards of directors of Worldpay Group plc and Vantiv, Inc. have announced that they have reached an agreement in principle on the key terms of a potential merger of Worldpay and Vantiv.
See below details of the merger:
Under the terms of the Potential Merger, the ordinary shareholders of Worldpay (the “Worldpay Shareholders”) would receive:
For each ordinary share in Worldpay (a “Worldpay Share”):
£0.55 in cash; and
0.0672 new Vantiv shares (the “New Shares”)
Worldpay Shareholders would also be entitled to a cash dividend of 5 pence per Worldpay Share, in place of any anticipated interim dividend payment to be declared and approved by the Board of Worldpay by the time of Worldpay’s Half Year Results 2017.
The total value to Worldpay Shareholders would be £3.85 per Worldpay Share comprising the 5 pence dividend payment and £3.80 per Worldpay Share under the terms of the Potential Merger, based on the closing share price of Vantiv on 3 July 2017 of $62.51 (and converted to Pound Sterling using an exchange rate of £1:$1.2921, being the exchange rate at 5:00 pm on 4 July 2017).
The Potential Merger terms (excluding the dividend) represent:
A premium of approximately 18.9% to the closing Worldpay Share price on 3 July 2017, the day before the Possible Offer Announcement; and
A premium of approximately 20.7% to the closing Worldpay Share price on 30 June 2017, the day prior to broad sector consolidation speculation; and
A premium of approximately 29.7% to the 6 month volume weighted average price of £2.93 per Worldpay Share on 3 July 2017.
Following completion of the Potential Merger, Worldpay Shareholders would own approximately 41% of the share capital of the Combined Group on a fully diluted basis.
Compelling Strategic and Financial Rationale
The Boards of Worldpay and Vantiv see compelling strategic, commercial and financial rationale for combining Worldpay and Vantiv’s complementary businesses.
The Potential Merger creates a scale world class payments group in a dynamic market, with deep payments capabilities, product and vertical expertise and strong distribution channels to serve merchants around the world in the global ecommerce market, and in-store and online in the UK and US markets.
The Combined Group is expected to benefit from its strong presence and substantial opportunities in integrated payments and global ecommerce.
It will serve a wide range of customers, with a strong position in the four core regions of the US, Europe, Asia-Pacific and South America, including many of the world’s largest ecommerce merchants, and a substantial base of merchants of all sizes in Europe and the US.
The Combined Group will benefit from cutting-edge innovation, and substantial engineering capability and talent, with hubs in the UK, Europe and US.
The Boards of Worldpay and Vantiv have identified substantial opportunities for cost synergies, which support significant potential shareholder value creation.
In addition, the Boards of Worldpay and Vantiv believe that there would be additional revenue growth opportunities that may be realised as a result of the Potential Merger.
The Boards of Worldpay and Vantiv believe that the Combined Group will have a strong management team with deep industry experience and a strong track record.
Governance and Management
The Combined Group will bring together the best of both companies’ management to create a world class leadership team. To ensure a successful and smooth integration, the Combined Group will be led by Charles Drucker as Executive Chairman and Co-CEO and Philip Jansen as Co-CEO, with Stephanie Ferris as CFO.
The Board of the Combined Group will consist of 4 Worldpay Directors and 7 Vantiv Directors, with both Sir Michael Rake and Jeffrey Stiefler continuing to serve on the Board in non-executive positions.
Worldpay Trading Update
Worldpay’s current trading and outlook for the half year is in line with Worldpay’s management expectations.
Further Details on the Potential Merger
Following completion of the Potential Merger, Worldpay Shares will be delisted from the London Stock Exchange. Common stock in Vantiv, which will be the ultimate holding company of the Combined Group, will continue to be listed on The New York Stock Exchange.
· Discussions between the parties remain ongoing regarding the other terms and conditions of the Potential Merger.
· Worldpay and Vantiv will proceed with a mutual due diligence process. The terms and conditions of any offer if made will be set out in a further announcement. There can be no certainty that any transaction will occur
Vantiv reserves the right, with the agreement or recommendation of the Worldpay Board, to make an offer for Worldpay, at any time, (a) on less or more favourable terms than the Potential Merger described above; and (b) varying the exchange ratio and/or cash consideration component and/or introducing other forms of consideration. Vantiv reserves the right to reduce the consideration in the event a dividend is declared and paid or becomes payable by Worldpay above the agreed 5 pence dividend.
Completion of the Potential Merger will be subject to shareholder approvals and receipt, on satisfactory terms, of regulatory and merger control approvals as appropriate, as well as other customary conditions.
In accordance with Rule 2.6(a) of the UK Takeover Code, Vantiv is required to clarify its intentions by no later than 5.00pm on 1 August 2017 (or such later date as the Takeover Panel may consent to in accordance with the Code), by either announcing a firm intention to make an offer or that it does not intend to make an offer.
Worldpay said the announcement has been made with the consent of Vantiv.