Worldpay/Vantiv: bidder open to secondary listing, headquarters solutions (MergerMarket)
Worldpay [LON:WPG] bidder Vantiv [NYSE:VNTV] accepts there is some rationale to having a secondary listing in London and sees it as a potentially easy fix for some disgruntled shareholders, it is understood.
On announcing the possible offer on 5 July, Worldpay said it had agreed "key terms"’ and that the companies would proceed with mutual due diligence. The extension of the PUSU deadline today to 8 August -- rather than for longer as is permitted under UK takeover rules -- is a sign that the parties are close to a deal, it was said.
Vantiv’s decision today to hold its results call on 8 August, along with Worldpay, could also be seen as a positive sign the parties will have agreed the deal by then, it was said.
A small percentage, understood to be less than 15%, of Worldpay shareholders who are not mandated to hold US shares would benefit from a listing in London, secondary to the US. Listing the company in London would be a fairly easy and inexpensive fix, meaning any issues here very solvable, it is understood.
The location of headquarters is similarly not a key risk, it was said. Several headquarters are possible and not a contentious idea, it is understood. Maintaining UK headquarters would go some way to calming any fears about job losses, it was noted.
The sale of UK star Worldpay to US-based Vantiv has not attracted scrutiny from UK politicians so job and other pledges aren’t so important, a banker following the deal said.
Neither is the question of main headquarters important for any tax synergy discussions, as this will depend on where the company is incorporated, it was noted. Depending on its domicile, the deal could use an inversion structure, as previously reported.
Given all the above, and with key terms and management team agreed on, one important detail to agree on is the synergy level, the banker said. Vantiv needs to ensure this is well priced in to prevent any further shareholder discontent, the banker said. The offer is too low, one top-15 shareholder told this news service, as previously reported.
The presence of US activist Sachem Head Capital Management in the Worldpay shareholder register has not raised alarm, it is understood. The stock part of the offer means it would be more difficult to engage in bumpitrage, it was said.
Sachem has amassed a 2.3% stake in Worldpay, but hasn’t publicly made any demands. Sachem’s form 8.3 says the nature of its Worldpay dealing is "increasing a long position".
On 5 July, Worldpay agreed to preliminary terms for a possible equity and cash merger with Vantiv valuing the target at approximately GBP 7.6bn. The offer was at an 18.9% premium to Worldpay’s closing prior, and would leave Worldpay shareholders with a 41% ownership stake in the combined group.
Worldpay declined to comment. Vantiv did not respond to a request for comment.