Worldpay valued at £9.1 billion in preliminary agreement with Vantiv
UK payments processor Worldpay has reached a preliminary agreement to merge with US rival Vantiv in a deal valuing the British group at £9.1 billion.
Vantiv's offer will see it pay 385p a share for Worldpay, or £7.7 billion, plus £1.4 billion to cover debts.
Its bid has muscled out rival suitor JPMorgan Chase, which confirmed it was pulling out of the takeover tussle.
The tie-up will create a trans-Atlantic payments processing giant with a combined market value of more than 20 billion US dollars (£15.5 billion).
Under terms of the proposed deal, FTSE 100 firm Worldpay will delist from the London stock market, but will be run by two chief executives and co-headquartered between London and Vantiv's base in Cincinatti.
Shares in Worldpay fell 8% as JPMorgan's decision to bow out dashed investor hopes of a bidding battle, but the stock had rocketed by 27% on Tuesday after it first revealed early stage takeover offers.
JPMorgan confirmed it had been at "a very early stage" in considering bidding for Worldpay, but decided not to make an offer.
"JP Morgan continues to hold Worldpay in high regard," it added.
Worldpay shareholders would own around 41% of the combined group under the deal with Vantiv.
The firms said the proposed deal "creates a scale world-class payments group in a dynamic market".
Worldpay processes millions of payments a day in stores, online and on mobile phones.
It operates worldwide, but with strength in the UK and US markets.
Vantiv is largely focused on the US, helping merchants, banks and credit unions accept card payments, as well as gift cards and online payments.
After its potential merger with Vantiv, the enlarged group would be led Worldpay's current boss Philip Jansen as co-chief executive and Vantiv's Charles Drucker as executive chairman and co-chief executive.
Worldpay chairman Sir Michael Rake and his counterpart at Vantiv, Jeffrey Stiefler, will remain on the board as non-executive directors.
The two firms said talks were ongoing over other terms and conditions of the merger.
Vantiv has until August 1 to make a firm offer, according to takeover rules.
Worldpay has 400,000 customers and was owned by Royal Bank of Scotland until the state-backed lender sold off its remaining stake to private equity firms Advent International and Bain Capital in 2013.
The company later sealed the biggest flotation of 2015 when it listed on the London Stock Exchange with a valuation of £4.8 billion.
Vantiv is based in Cincinnati, Ohio, handling 25 billion transactions worth 920 billion US dollars (£711 billion) last year.