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Sabadell in talks with Worldline, Nexi and Fiserv for payments deal -sources
Global Banking & Finance Review®
Company
By Pamela Barbaglia, Jesús Aguado and Andres Gonzalez
By Pamela Barbaglia, Jesús Aguado and Andres Gonzalez
LONDON/MADRID (Reuters) -Spanish bank Sabadell has received indicative bids from France’s Worldline, Italy’s Nexi and U.S. firm Fiserv for its payments arm, with a deal valued at up to 400 million euros ($394 million), three sources said.
Sabadell received the non-binding offers last week and is expected to shortlist a group of final bidders in early October, the sources said, speaking on condition of anonymity.
The Spanish lender will review the offers at a board meeting in late September and then move to the final stages of the auction, allowing bidders to carry out due diligence on the unit, the sources said.
Worldline, Nexi and Fiserv declined to comment.
Sabadell, which declined to comment on the names or offers, confirmed on Thursday evening in a statement it “is in the process of analyzing a possible strategic agreement with an industrial partner specializing in the bank’s acquisition business (payments unit)”.
The sale, which is being handled by Barclays, has only addressed industry players including U.S. giant PayPal and rival firms Fidelity National Information Services Inc (FIS) and Network International, while private equity funds were not invited to bid, two of the sources said.
PayPal, FIS and Network International were not immediately available for comment.
Shares in Sabadell closed 5% up on Thursday, leading gainers on Spain’s blue-chip index Ibex-35, which fell 1.24%.
“Sabadell’s better share performance relative to other Spanish banks is explained partly by reports of bids for its payments unit, now pointing to a higher price than previously expected,” said Nuria Alvarez, analyst at Madrid-based brokerage Renta 4.
Earlier this year, press reports pointed to a price tag of 250 million to 350 million euros for the unit.
The analyst added that the general context for banks was favourable because of rate hikes in the euro zone and the UK.
Sabadell is also present in the UK through its British unit TSB.
In Spain, Sabadell has a strong presence on the payments front and accounts for close to 16.3% of the country’s overall revenue generated at the point of sale (POS).
Its payments arm, which is mainly focused on consumer lending, has core earnings of about 25-30 million euros, one of the sources said.
The business reported sales of 21.6 billion euros in the first half of 2022 compared to 15.4 billion euros in the same period last year and is a source of stable and profitable income for the bank as payments transactions tend to carry a higher interest than mortgages.
The sale is expected to be finalized in December and will result in the winner striking a long-term partnership with Sabadell, which will retain an exclusive right to commercialize loans or financial transactions.
($1 = 1.0162 euros)
(Reporting by Pamela Barbaglia, Jesus Aguado and Andres Gonzalez; additional reporting by Valentina Za, Julien Ponthus and David French; editing by Deepa Babington, Mark Potter and Richard Pullin)
A payments arm refers to a division within a financial institution that specializes in processing transactions, including credit and debit card payments, electronic transfers, and other payment methods.
A non-binding offer is a proposal made by a potential buyer that indicates interest in purchasing an asset but does not legally obligate the buyer to complete the transaction.
Indicative bids are preliminary offers made by potential buyers that provide an estimate of the price they are willing to pay for an asset, subject to further negotiation and due diligence.
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