End of an era: Worldpay to delist from London Stock Exchange

Worldpay, one of the most prominent payments technology companies that has for many years worked very closely with the online retail brokerage industry, has been the subject of very high profile mergers and acquisitions activity during recent times, the most notable recent example being its entry into a definitive merger agreement just under a month ago with New York Stock Exchange-listed FinTech expert FIS as reported by FinanceFeeds.

Today, the firm heads further into its new corporate direction by announcing its intention to de-list its stock from the London Stock Exchange, where its shares have been publicly listed since its initial public offering (IPO) was completed in 2015.

Worldpay’s intention to de-list is part of its steps toward completing its merger with FIS, the company having stated today publicly that it has applied for the cancellation of the listing of its shares of Class A Common Stock on the standard segment of the Official List of the Financial Conduct Authority and of trading on the Main Market of the London Stock Exchange plc. The Delisting is intended to take effect at or around 8:00 a.m. (BST) on May 20, 2019.

Following completion of the merger between Worldpay (formerly Vantiv, Inc.) and Worldpay Group plc on January 16, 2018, Worldpay continued to monitor and analyse the number of shareholders and the level of trading of Shares on the LSE. The number of shareholders trading and of Shares being traded on the LSE has decreased significantly over this period and therefore Worldpay believes that the administrative costs in connection with maintaining the listing of Shares on the LSE are no longer justified.

Worldpay and FIS announcement reported by FinanceFeeds on March 18 stated that the two entities had entered into a definitive merger agreement, pursuant to which, at closing, Worldpay shareholders will be entitled to receive 0.9287 FIS shares and $11.00 in cash for each Share, which, as of March 15, 2019, the last full trading day before the public announcement of the proposed transaction, valued Worldpay at an enterprise value of approximately $43 billion (including the assumption of Worldpay’s debt) (the “FIS Transaction”).

As part of the FIS Transaction, Worldpay has agreed to use its reasonable best efforts to take, or cause to be taken, all actions reasonably necessary to cause the Delisting before completion of the FIS Transaction. The FIS Transaction is subject to a number of conditions, including receipt of required shareholder and regulatory approvals.

For the reasons stated above, Worldpay has stated that it intends to proceed with the Delisting regardless of whether the FIS Transaction completes or not. As part of the Delisting, the existing depositary interest facility will be terminated and Worldpay shareholders who hold depositary interests which facilitate the trading of Shares on the LSE will be transitioned into a CREST depositary interest facility.

Worldpay intends to provide a proxy service to ensure that those shareholders are still able to vote on the FIS Transaction. In addition, Worldpay shareholders who are transitioned into the CREST depositary interest facility will continue to be eligible (as at the relevant record date) to receive any consideration due to them following completion of the FIS Transaction.

The Shares will continue to be traded on the New York Stock Exchange pending completion of the FIS Transaction. However, following the Delisting, Worldpay will no longer be required to comply with the Listing Rules, the Disclosure Guidance and Transparency Rules or the Market Abuse Regulation.

WorldPay was established as an online multi-currency payment system in 1997 by Nick Ogden, who partnered with National Westminster Bank to provide the financial systems and Andrew Birch of Symbiant to provide the end user payment gateway.

When Royal Bank of Scotland took over National Westminster Bank, Worldpay was wholly acquired and merged with an electronic payment system called Streamline which was first released by Centre-file ltd, a wholly owned subsidiary of National Westminster Bank, in 1989.

In 1995 the Streamline system was reabsorbed into the bank when the trading name and payroll service of Centre-file ltd were sold to Ceridian. NatWest was acquired in 2002 by Royal Bank of Scotland Group which renamed the business RBS WorldPay.

RBS expanded the business significantly by acquiring and merging a number of payment solutions companies from different countries. Over the next five years it was combined with seven leading retail payment solutions brands: Streamline, Streamline International, PaymentTrust, Netherlands based Bibit, RiskGuardian and US-based Lynk.

As a condition in the European Commission’s clearance in December 2009 of state aid to RBS, Worldpay was to be sold as part of a plan to divest selected businesses from the group. On 6 August 2010, Advent International and Bain Capital agreed to acquire Worldpay for £2.025bn including a £200m contingent consideration. The RBS Group retained a 20% stake in the newly independent business[8] with Advent International and Bain Capital owning 40% each. The sale completed on 1 December 2010. RBS WorldPay was renamed Worldpay as part of the deal.

At that time, many new retail FX brokerages came to fruition, largely as a result of the influx of affiliate marketing entities into the FX business via white labeled off-the-shelf MetaTrader platforms, and Worldpay became a very significant payment processing partner for many of the newly established retail brokerages.

On 21 December 2010, almost immediately following on from the sale, Worldpay acquired Cardsave, one of the UK’s leading independent sales organisations distributing credit and debit card processing services to small retailers. In May 2011 Worldpay acquired Envoy Services Limited, a leading provider of alternative payment solutions to eCommerce merchants worldwide, for an undisclosed amount.

In June 2013, Worldpay launched Worldpay Zinc, a mobile card processing terminal which connects to smart phones. In September 2013 Worldpay revealed it had acquired US payment processing company Century Payments. Then in November 2013, Royal Bank of Scotland said it had sold its remaining stake of about 20 percent in Worldpay to the payment processing firm’s majority shareholders, private equity firms Advent International and Bain Capital. The company listed on the London Stock Exchange through an initial public offering (IPO) in October 2015.

In October last year, Worldpay ended its referral arrangement with RBS.

FIS has not yet provided its mantra on how Worldpay will operate post-merger, however it remains one of the bona fide payment technology providers for this industry, which is something of a rarity indeed.