Worldline shares regain some ground after Wednesday's 38% fall

By Gianluca Lo Nostro

(Reuters) -Worldline shares recovered some of their losses in early trade on Thursday, after allegations by a media consortium sent the payments group's stock falling by 38% on Wednesday, wiping out 500 million euros ($585 million) of its market value.

A group of 21 European media outlets on Wednesday alleged Worldline continued doing business with merchants that German regulator BaFin had banned its German subsidiary Payone from working with in 2023 for failing to comply with anti-money laundering and anti-fraud requirements. 

In response to the reports, the French company said that, since 2023, it had strengthened merchant risk controls and terminated non-compliant client relationships.

Shares in Worldine were up 12% to 3.18 euros by 0811 GMT, after rising as much as 14.3% earlier.

The group's shares endured their second-biggest one-day loss since October 2023 on Wednesday.

The Paris-based firm, once valued at over 20 billion euros ($23.4 billion), has been grappling with waning consumer sentiment and contract terminations that have led to repeated cuts to its financial outlook.

Newly-appointed CEO Pierre-Antoine Vacheron said on Wednesday that, since 2023, it had embarked upon "a rigorous process to identify merchants whose practices did not align with our updated standard."

He said that process had been carried out under close regulatory oversight, particularly in Germany.

"We are making good progress on repositioning the company and putting it back on track for robust cash generation," he told analysts in a call after the market closed.

Investors will want to see proof of stabilisation before buying back into the stock, J.P. Morgan analysts said in a note to clients after that call.

"We still see a risk that today’s negative news articles will have a detrimental effect on the business, hampering efforts to stabilize Worldline and return the business to cash-generating growth," they said.

($1 = 0.8549 euros)

(Reporting by Gianluca Lo Nostro; Editing by Matt Scuffham)