Worldpay, the UK payment-processing company that listed in London two years ago, said it has received preliminary takeover approaches from Vantiv and JPMorgan Chase.
Worldpay shares surged as much as 26% in London, giving the former payment-processing division of Royal Bank of Scotland a market value of £7.8bn (€8.89bn ).
Other payments companies also gained, with Germany’s Wirecard and France’s Worldline climbing 5.3% and 4.4% respectively.
“A combination with either Vantiv or JPMorgan would make sense in terms of the overlap of their businesses,” said Martin O’Sullivan, an analyst at Cenkos Securities in London with a hold rating on Worldpay shares.
“Vantiv and JPMorgan are the No. 1 and No. 2 payments acquirers worldwide in terms of the volumes they process. That’s mainly because they’re super strong in the US, while Worldpay is No. 1 in the U.K. and Europe,” Mr O’Sullivan said.
"There’s no certainty that an offer will be made, and to comply with UK takeover rules, Vantiv and JPMorgan must say by the beginning of August whether they intend to bid, Worldpay said.
Payment services upstarts are challenging traditional banking’s grip on the movement of money as customers increasingly make payments on mobile devices.
Technology giants including Apple, are also jumping in to disrupt an industry that has long been the domain of banks.
The announcement comes a day after Danish payment services provider Nets said it’s reviewing its options after receiving interest from potential buyers.
While combining Worldpay with either JPMorgan or Vantiv would bring efficiency from sharing operations, it could also help the companies to “mount a more robust defense to new kids on the block,” Mr O’Sullivan added.
WallStreet Wires had said earlier that Worldpay, whose shares have climbed more than 60% since its listing in 2015, had received an approach and hired advisers. The total value of transactions handled by the company grew 14% to £14.9bn in 2016, while revenue increased 15% to £4.5bn and pretax profit rose to £264.1m.
RBS sold a majority stake in Worldpay to Bain Capital and Advent in 2010 to comply with European state aid rules after receiving a £45.5 bn bailout from the UK government during the financial crisis.
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