Worldpay Hunts New Chair As Allan Steps Down

John Allan, the new chairman of Tesco (Xetra: 852647 - news) , is to step down from his role at Worldpay as the payments processing giant heads towards one of London's biggest stock market flotations in years.

Sky News has learnt that Worldpay will announce on Friday that Mr Allan will vacate the role of chairman, which he has held since 2011.

The company, which has been owned by two buyout firms, Advent and Bain Capital, for five years, has appointed headhunters to identify Mr Allan's successor.

Mr Allan, who also chairs Barratt Developments (LSE: BDEV.L - news) , the housebuilder, is expected to remain on Worldpay's board as a non-executive director, sources said on Thursday.

His decision to step down as chairman will avoid placing him in the potentially awkward position of simultaneously chairing three FTSE-100 companies, which would have risked antagonising corporate governance managers at major City institutions.

The scale of Tesco's problems mean that it will require Mr Allan to spend the majority of his time with the UK's biggest retailer.

The news of Worldpay's board reshuffle gives the clearest indication to date that the company is actively planning for an initial public offering that is expected to value it at more than £6bn.

Worldpay, the UK-based payment processing giant, has picked a leading City firm to prepare it for a flotation that could propel it straight into London's blue-chip share index.

Sky News revealed this month that Worldpay's shareholders had hired Goldman Sachs (NYSE: GS-PB - news) and Lazard, the investment banks, to work on the listing.

Advent and Bain bought the company from Royal Bank of Scotland (LSE: RBS.L - news) as the taxpayer-backed lender sought to dispose of assets following its £45.5bn bail-out.

A flotation of the company in London is the likeliest exit route for Advent and Bain, although they will also look at New York equity markets, while a small number of alternative buyers could also be sounded out in the coming months.

The trajectory of stock markets may, however, price out any emerging bidders.

Worldpay has grown at a spectacular rate since it was carved out of RBS in a deal worth around £2bn.

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

It processes 26 million transactions daily and operates in more than 40 countries.

Comparable listed companies such as Wirecard (Xetra: 747206 - news) and Brazil’s Cielo (Sao Paolo: CIEL3.SA - news) tend to trade at 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.

For the last two years, the company has been run by Philip Jansen, a former executive with the catering group Sodexo and MyTravel, the tour operator.

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

Worldpay, which could not be reached for comment on its search for a new chairman, also owns a valuable stake in Visa Europe.