Yahoo Finance Buyout Giants Bid To Derail £6bn Worldpay IPO
Blackstone (NYSE: BX - news) and Hellman & Friedman (H&F), two of the world's biggest buyout firms, are joining forces in a bid to derail a blockbuster £6bn flotation by Worldpay, the payments processing group.
Sky News has learnt that the two private equity giants are in talks about a joint bid for Worldpay that is expected to be tabled within weeks.
A Singaporean sovereign wealth fund may add further firepower to their offer, which will be competing against a number of Worldpay's rivals in the payments industry, according to people close to the situation.
Sources said on Thursday that H&F was working "furiously" to come up with an offer that would persuade Advent International and Bain Capital, Worldpay's current owners, to shun a flotation and pursue a sale instead.
Blackstone and H&F are understood to have lined up financing from a number of banks.
Advent and Bain are likely to decide by the autumn which route to take, with Worldpay set to be propelled straight into the FTSE-100 if they decide on a public listing.
The company recently appointed Sir Mike Rake, the City grandee, as its new chairman, and has hired six investment banks to work on the float.
Sir Mike will replace John Allan, although his appointment at Worldpay sparked concern at the banking regulator because of his intention to step down as Barclays (LSE: BARC.L - news) ' deputy chairman during a period of upheaval for the lender.
An insider said there had been strong interest from institutional investors in buying Worldpay shares, and that a preliminary meeting took place between the company and City analysts earlier this week.
The looming change of ownership comes roughly five years after Worldpay was sold by the bailed-out Royal Bank of Scotland (LSE: RBS.L - news) (RBS) in a deal worth approximately £2bn.
Advent and Bain bought Worldpay as the taxpayer-backed lender sought to dispose of assets following its £45.5bn bail-out.
The payments group 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 (Hanover: SON1.HA - 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 valuable stake in Visa Europe, which is in talks about a takeover by its US cousin, Visa Inc (Xetra: A0NC7B - news) .
