Worldline attracts early stage interest from private equity firms, sources say

Atos SE

03/12/2024 13:54

* 
      Private equity firms take early stage interest in
Worldline
    

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      Bain Capital says "not looking at Worldline"
    

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      Worldline shares fall 8%
    

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      Worldine declines to comment 
    

  
 (Updates story first published on Monday Dec. 2 with statement
from Bain Capital in paragraph 4, Citi comment in para 7, bullet
points and share price reaction)
    By Amy-Jo Crowley and Mathieu Rosemain
       LONDON, Dec 3 (Reuters) - French payments group
Worldline  WLN.PA  has attracted early stage takeover interest
from private equity firms, as it grapples with a falling share
price, profit warnings and leadership change, five people with
knowledge of the matter said.
    Bain Capital is among private equity firms that have been in
the initial stages of evaluating a possible bid for Worldline,
two of the people said.  
    The firm has spoken with advisers to consider different
permutations of how a bid could be formulated for Worldline,
shares of which have been trading near a record low, one of the
people said. The conversations have taken place over recent
weeks, a second person said.
    Bain Capital, which previously declined to comment, on
Tuesday said it is "not looking at Worldline or involved in the
reported takeover deliberations".
    Shares in Worldline, which had a market capitalisation of
1.88 billion euros ($1.98 billion) at Friday's close, rose as
much as 21% on Monday after the Reuters report before falling as
much as 8% on Tuesday.  
    Worldline said it did not comment on market rumours. 
    Bain has experience in the payments sector, holding a 10%
stake in and a board seat at Italy's Nexi  NEXII.MI  alongside
peer Advent International. If Bain were to bid for Worldline it
would have to consider what to do with its stake in Nexi, the
first person said. Citi analysts wrote in a note that Bain's
Nexi stake and board presence "could result in a conflict of
interest".
    Deliberations are at an early stage and a formal offer is
not certain, the people said, asking not to be identified
because the talks are confidential. 
    Discussions about a potential deal come during a challenging
period for Worldline. Its shares have fallen by 92% since July,
2021 when investor enthusiasm for payments companies peaked,
after recording three profit warnings within a year. 
    The company has since pursued cost-cutting measures
including selling its Mobility and e-Transactional Services
(MTS) business and laying off 8% of its workforce, Reuters
reported.
    Any bid could pose challenges. Worldline shareholders may
not want to sell out at a historically low price, some of the
people said. Any bidder may need to win over state-owned
investment bank Bpifrance, which is a top 10 shareholder in
Worldline with a 5% stake, they added.  
    Credit Agricole also has a 7% stake in Worldline and a
partnership targeting merchants, which it may want to maintain,
a fifth person familiar with the situation said. Bpifrance and
Credit Agricole declined to comment.
    The payments sector has seen an increase in dealmaking. 
    Private equity firm GTCR struck a deal last year to buy
Worldpay, the Fidelity National Information Services Inc. unit
handling card payments for businesses across the world.
    Brookfield has also been in talks to buy Barclays' payments
business, according to reports. The Canadian group also led a
consortium to acquire Middle Eastern payments group Network
International for $2.8 billion in 2023.
    Worldline was spun out of French technology group Atos in
2014, and has grown through acquisitions including merchant
acquirer Ingenico in 2020 for 7.8 billion euros. It has been
competing against Nexi and other payments companies for assets. 

($1 = 0.9518 euros)

 (Reporting by Amy-Jo Crowley in London and Mathieu Rosemain in
Paris. Additional reporting by  Elvira Pollina in Milan and
Florence Loeve in Paris. Editing by Anousha Sakoui and Susan
Fenton, Kirsten Donovan)
 ((Amy-Jo.Crowley@thomsonreuters.com;))