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Buyout Firms Gatecrash £6bn Worldpay Float

A pack of giant investment firms are examining takeover bids for Worldpay, the UK-based payment processing group which is drawing up plans for a stock market listing valuing it at £6bn.

Sky News has learnt that private equity groups including Blackstone (NYSE: BX - news) , CVC (Taiwan OTC: 4744.TWO - news) and Hellman & Friedman (H&F) are in talks with Worldpay's owners about making offers that could derail a public listing.

CVC is understood to be working with a major Canadian pension fund - said to be the Canada Pension Plan Investment Board - while H&F is discussing a joint bid with Singapore's Government Investment Corporation, according to insiders.

None of the proposals is yet at a formal stage, but the interest of such substantial firms - along with trade buyers like JP Morgan - underlines the potential for an outright takkeover of one of the UK's technology champions.

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Worldpay is owned by Advent International and Bain Capital, two buyout firms which have controlled the payments processor since 2010.

In recent weeks they have hired Bank of America Merrill Lynch, Goldman Sachs (NYSE: GS-PB - news) and Morgan Stanley (Xetra: 885836 - news) as global co-ordinators for a public share sale, which could take place as soon as this year.‎ ‎ Barclays (LSE: BARC.L - news) , Credit Suisse (NYSE: CS - news) and UBS (NYSEArca: FBGX - news) have also been chosen to act as bookrunners on the deal, which could net the six investment banks tens of millions of pounds in fees.‎

Fund management sources said there was strong interest in buying Worldpay shares and hinted that an announcement from the company about a flotation could take place in the coming months.

‎An initial public offering, which remains the likeliest option but could depend on markets' reaction to the ongoing situation in Greece, would catapult Worldpay into the FTSE-100 index.

It would come roughly five years after the company was sold by the bailed-out Royal Bank of Scotland (LSE: RBS.L - news) (RBS) in a deal worth approximately £2bn.‎

‎The company, which processes 26m transactions daily and operates in more than 40 countries, is now on the hunt for board directors as part of its preparations for going public.

‎The current chairman, John Allan, who also chairs Tesco (Xetra: 852647 - news) and the housebuilder Barratt Developments (LSE: BDEV.L - news) , is to remain on the board as a non-executive director, while the appointment of his successor is said to be imminent.

Advent and Bain bought Worldpay from RBS as the taxpayer-backed lender sought to dispose of assets following its £45.5bn bail-out.‎ ‎‎ Worldpay has grown at a spectacular rate since then, with Philip Jansen, a former executive with the catering group Sodexo and MyTravel, the tour operator, spearheading the company's growth.

Specialising in the provision of secure payment services, its major corporate customers include Google (Xetra: A0B7FY - news) and Sony (Swiss: SONC.SW - news) .

Comparable listed companies such as Wirecard (Xetra: 747206 - news) and Brazil’s Cielo (Sao Paolo: CIEL3.SA - news) usually trade at valuations worth between 14 and 20 times their annual profits.

With Worldpay expected to record around £400m of pre-tax profit in 2015, a similar valuation range would attribute a price tag of between £5.6bn and £8bn to the company.

In the UK, Worldpay combines the former Streamline business with Cardsave, YESpay and Zinc, handling well over half of all card transactions.

The company sees further growth opportunities in the ongoing push to open up payment systems, with a new regulator recently assuming oversight of the industry.

Under his leadership, it has begun implementing a new brand identity using the slogan "Leaders in Modern Money".

Worldpay, which declined to comment, also owns a potentially valuable stake in Visa Europe.‎