Britain’s largest payment processor and ex-Royal Bank of Scotland firm Worldpay said it agreed to “key terms” of a “possible offer” from US credit card technology company Vantiv in a “potential” deal valued at around £7.7 billion.
Including Worldpay’s debt, the deal could be worth up to £9.1 billion.
Shares of Worldpay had earlier soared after it said it had been approached by both Vantiv and JPMorgan.
Under the terms of Wednesday’s potential offer, Vantiv would pay 55p in cash, 0.0672 of a new Vantiv share and a 5p cash dividend per Worldpay share for a total of 385p per share.
Although this is an 18.9% premium to Worldpay’s closing share price on Monday, it is below the 431p the shares hit before the potential offer announcement.
Worldpay shares fell almost 9% after the announcement to around 372p.
If the deal goes through, Worldpay shares would be delisted from the London Stock Exchange and common stock in Vantiv, the ultimate holding company of the combined group, would continue to be listed on The New York Stock Exchange.
Worldpay shareholders would own about 41% of the new company.
The combined firm would be led by Vantiv chief Charles Drucker as executive chairman and co-CEO and Worldpay’s Philip Jansen as co-CEO.
The board of the combined group would consist of four Worldpay directors and seven Vantiv directors.
“Discussions between the parties remain ongoing regarding the other terms and conditions of the potential merger … ” said Worldpay.
“The terms and conditions of any offer if made will be set out in a further announcement. There can be no certainty that any transaction will occur.”
JP Morgan Chase, meanwhile, said in a statement: “In response to an invitation from Worldpay, J.P. Morgan was at a very early stage in considering whether or not to make an offer or the terms of any offer for Worldpay.
“Following preliminary considerations, J.P. Morgan hereby announces that it does not intend to make an offer for Worldpay.”
In 2010 Royal Bank of Scotland sold a majority stake in Worldpay to Bain Capital and Advent International and in 2015 the firms took Worldpay public in October at 240p per share, according to Bloomberg data.