LONDON (Alliance News) - A slew of companies in the UK financial sector on Monday said they have agreed to sell their stakes in Visa Europe as part of the EUR16.5 billion takeover of the business by US payments company Visa Inc.
Payments processing company Worldpay Group PLC and banks Lloyds Banking Group, Barclays PLC and The Royal Bank of Scotland Group PLC all said on Monday they have agreed to sell their stakes in the Visa Europe business.
Lloyds expects to make a pretax gain of around GBP300.0 million on the sale, the total consideration for which will include an upfront cash payment plus shares in Visa Inc. It did not provide any further financial details on the sale.
Barclays expects to make a post-tax profit of GBP400.0 million on the sale and also did not provide any details on the total consideration it will receive. RBS will make an initial pre-tax gain of GBP200.0 million on completion of the transaction.
Worldpay's portion of the consideration will total EUR1.25 billion, including an upfront cash payment of EUR592.0 million and a further EUR374.0 million in shares in Visa Inc, also upfront. It will get a further EUR283.0 million in deferred consideration based on Visa Europe hitting earnings targets for the 16 quarters following the deal.
Worldpay will, however, only retain 10% of the total consideration for the stake, with the other 90% to be paid to holders of contingent value rights, a separate class of share in Worldpay, which listed in London last month.
The disposal is expected to complete in the second quarter of 2016.
Shares in Lloyds were up 1.3% to 74.72 pence on Monday, while Barclays shares were up 1.3% to 235.00p and RBS shares were up by 1.3% to 321.80p. Worldpay shares were up 1.2% to 282.25p.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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