One of the sticky points holding back the negotiations is the location of the combined company. While Worldpay is pushing London as the location for the HQ, the terms of Brexit are likely to play a key role in deciding whether the location is going to be.
U.S.-based Vantiv has received an extension of up to August 8 for placing its acquisition bid for British payments company Worldpay or keep away for six months.
On July 5, Vantiv in its bid had proposed to acquire Worldpay, a former unit of Royal Bank of Scotland, for $10.17 billion (7.7 billion pounds) and had until August 1 to submit its formal bid. However with both the companies still negotiating the final terms of the deal, including the location of the combined group, Vantiv has yet to place its bid, said sources.
As per Worldpay, the “positive discussions” are on-going. There is however no certainty that it will result in a firm offer from Vantiv.
Furthermore, the deadline is subject to the approval of the UK Takeover Panel, thus the deadline could potentially be pushed back even further.
The location of the HQ of the combined entity is said to be one of the sticky points, revealed sources. Worldpay wants it to be based in London and has asked for binding commitments to protect British jobs.
According to sources, Worldpay is pushing it this way in order to make the deal more palatable to the British government which has recently taken a more protectionist approach on mergers & acquisition, especially from foreign acquirers.
Case in point: earlier this year the LSE scrapped a deal with Deutsche Boerse to create Europe’s biggest exchange midst growing calls from German politicians that the headquarters be shifted from London to Frankfurt because of Brexit, a concession that became a sticky issue for LSE.
Vantiv’s bid to acquire Worldpay comes at a time when consumers are increasingly preferring to shop online which has attracted a series of newcomers who have adopted disruptive strategies to gain market share.
Under the terms of the deal that was announced on July 5, Vantiv will pay 55 pence in cash, 0.0672 of a new Vantiv share and a 5 pence cash dividend per Worldpay share, totaling 385 pence per share.
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