Worldpay Group Plc has agreed to a formal offer from U.S. rival Vantiv Inc. to take over the British payments company for approximately £8.0 billion, five weeks after they reached an initial agreement on a merger.
Under the terms of the merger, Worldpay shareholders will receive 55 pence in cash and 0.0672 new Vantiv share for each share that they hold in the British payments firm; an interim dividend of 0.8 pence per share that Worldpay already announced; and a special dividend of 4.2 pence per share that is conditional on completion of the deal.
Including the dividends, the deal values each Worldpay share at £3.97 and Worldpay's entire issued and to-be-issued ordinary share capital at approximately £8.0 billion. The consideration represents a premium of approximately 22.7% to the July 3 closing price of Worldpay, the last business day before the initial agreement was reached, and roughly 63.4% to the IPO price of Worldpay.
The merger, which will be implemented through a court-sanctioned scheme of arrangement, will include a mix-and-match facility, which will allow Worldpay shareholders to elect — subject to offsetting elections — to vary the proportions in which they receive cash and new Vantiv shares in respect of their holdings in the British firm.
London-based Worldpay said the deal implies an enterprise value of the British firm of roughly £9.3 billion, adding that the combined company will have a pro forma enterprise value of approximately £22.2 billion.
Cincinnati-based Vantiv will seek a secondary standard listing on the Main Market of the London Stock Exchange in relation to the new Vantiv shares following completion of the merger. In addition, the new Vantiv shares will be authorized for primary listing on the New York Stock Exchange subject to official notice of issuance.
Upon completion of the merger, Worldpay shareholders will own roughly 43% of the enlarged entity and Vantiv shareholders will own approximately 57% on a fully diluted basis. The combined entity, which will be named Worldpay, will house its global and corporate headquarters in Cincinnati and its international headquarters in London. It is expected to incur one-off restructuring and integration costs of approximately $330 million, the majority of which will be incurred by the end of the second year following completion of the deal.
Vantiv President and CEO Charles Drucker will serve as the executive chairman and co-CEO of the combined firm. Worldpay CEO Philip Jansen will serve as co-CEO, reporting to Drucker. Vantiv CFO Stephanie Ferris will hold a similar role in the combined company, whose board will consist of five Worldpay directors and eight Vantiv directors, with both Worldpay Chairman Michael Rake and Vantiv Chairman Jeffrey Stiefler continuing to serve on the board in nonexecutive positions.
The deal, which is subject to certain conditions and regulatory approvals, comes a day after the deadline for the U.S. firm to make a firm takeover offer for Worldpay was extended for a second time.