CEO, Manalo LLP

Roderick Manlo

Manalo LLP

We provide event driven research services to hedge fund managers and institutional investors that cover select definitive and pre-announced M&A deals, focusing on identifying and analysing the key upside and downside risks to a particular transaction. We primarily analyse $billion+ takeovers or mergers of publicly-traded European targets, but also look at deals globally to assess when there is a key European angle or aspect that can influence the deal outcome.

With over 16 years’ experience in risk arbitrage and investment banking, we specialise in providing research and advisory services on all facets of risk arbitrage, with particular expertise in:

- Cross-Border M&A
- Hostile Takeovers
- Local Takeover Codes
- Antitrust & Competition
- Financial Valuation
- Shareholder Vote Analysis
- Impacts of Precedent Transactions
- Risk Arbitrage Trading Strategies

Event-Driven

<p>The most likely outcome, by far, is that the Worldpay / Vantiv deal completes as anticipated. Notable nuances that may have the potential to disrupt deal consummation relate to the speculation or the realisation of a counterbid for either company. The sector is experiencing rapid growth and firms with payment processing capabilities have become attractive targets for banks, FinTech players and credit card companies. Worldpay is Europe’s second largest merchant acquirer by number of transactions, and is the largest in the UK.<a href="#_ftn1" target="_blank">[i]</a> It provides processing technology that allows retailers and other businesses to accept card payments and online or mobile transactions. Its rival, Vantiv, is the largest merchant acquirer in the US. Both companies are attractive targets for potential suitors looking to expand their offering and market share, highlighted by JP Morgan’s initial approach for Worldpay. While Vantiv is slightly larger and solely US-focused (possibly dissuading some buyers), significant downside in the case of a counterbid for Vantiv prompts us to explore the feasibility of this outcome. </p><p>We explore the valuation multiples offered for Worldpay and compare these to precedents, to decipher whether a fair price is being offered. Separately, we assess Vantiv’s valuation and, considering its size and operations, determine the likelihood of an unsolicited bid for the company. We assess possible buyers for each company and establish which deals may make sense.</p>

The most likely outcome, by far, is that the Worldpay / Vantiv deal completes as anticipated. Notable nuances that may have the potential to disrupt deal consummation relate to the speculation or the realisation of a counterbid for either company. The sector is experiencing rapid growth and firms with payment processing capabilities have become attractive targets for banks, FinTech players and credit card companies. Worldpay is Europe’s second largest merchant acquirer by number of transactions, and is the largest in the UK.[i] It provides processing technology that allows retailers and other businesses to accept card payments and online or mobile transactions. Its rival, Vantiv, is the largest merchant acquirer in the US. Both companies are attractive targets for potential suitors looking to expand their offering and market share, highlighted by JP Morgan’s initial approach for Worldpay. While Vantiv is slightly larger and solely US-focused (possibly dissuading some buyers), significant downside in the case of a counterbid for Vantiv prompts us to explore the feasibility of this outcome. We explore the valuation multiples offered for Worldpay and compare these to precedents, to decipher whether a fair price is being offered. Separately, we assess Vantiv’s valuation and, considering its size and operations, determine the likelihood of an unsolicited bid for the company. We assess possible buyers for each company and establish which deals may make sense.

Worldpay / Vantiv: Counterbid Feasibility for Worldpay and Vantiv