Published : 1 month ago, on 06/11/2024

By Florence Loeve, Amy-Jo Crowley and Mathieu Rosemain

PARIS/LONDON (Reuters) – Worldline has appointed banking advisers to sell its Mobility and e-Transactional Services (MTS) business, five people familiar with the matter said, as the company looks to rebuild investor confidence with its shares near record lows.

The plan to offload MTS, known internally as “project Manhattan”, was discussed during a summer board meeting and is now being pursued despite Worldline in September replacing its CEO and issuing its third profit warning within a year, two of the people said.

Worldline’s management is working with Rothschild & Co on the sale of MTS, the first and third sources told Reuters.

The Paris-based company is expected to proceed with an auction of MTS as soon as this year, but the process is in the early stages and a sale is not guaranteed, said the people, speaking on condition of anonymity while discussing confidential information.

It was not immediately clear how much MTS could fetch.

Spokespeople for Worldline and Rothschild declined to comment.

Worldline’s Mobility division provides digital payment services for public and private transportation including ticketing, tolling, and fare management. It contributed 48.2 million euros ($51.65 million) to the group’s adjusted core profit in 2023, about 5.3% of Worldline’s total profit, according to its results.

Separating MTS from Worldline should be relatively simple as it has a different set of customers and has been operating more or less on a standalone basis, two of the sources said.

Interim CEO Marc-Henri Desportes said last week during an earnings call that the group was launching a “portfolio optimisation process”.

“This process is already underway, even if it’s too early to name the assets here, and it will be essential for our transformation in 2025,” he said.

Citi analysts said this week that Desportes had reiterated during a recent roadshow that he wanted to prune underperforming businesses that account for less than 10% of Worldline’s revenues.

Worldline shares have tanked 92% from a high in July 2021 when investor enthusiasm for payments companies peaked, after repeated cuts to its financial targets. The company has been looking at cost-cutting measures including laying off 8% of its workforce and asset sales.

Activist investor Bluebell urged Worldline’s board to sell MTS last year, calling it a “non-core unit”.

Worldline turned to advisers at Morgan Stanley and Rothschild early this year in a bid to fend off a hostile takeover.

($1 = 0.9332 euros)

(Reporting by Florence Loève, Amy-Jo Crowley, Mathieu Rosemain and Gianluca Lo Nostro; Editing by Tommy Reggiori Wilkes and Sharon Singleton)