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Advent prepping £3 billion bid for RBS payment business - The Times

14 December 2009  |  15809 views  |  2 cash

Advent International has made an informal offer to buy Royal Bank of Scotland's global payment processing business in a deal that could value it at up to £3 billion, according to a report in the Times

RBS's Global Merchant Services, which handles more than five billion card transactions every year, is one of the businesses the bank has been ordered to sell by the European competition authorities.

Advent recently acquired a 51% stake in the card processing business of Fifth Third Bancorp in the US and has previously invested in other equivalent units, including Brazil's CSU CardSystem, and French merchant acquirer Monext.

Advent is not alone in running the role over the RBS unit, which is considered the fourth-biggest card processing business in the world.

Other private equity firms reportedly sniffing around the business include KKR, BC Partners and CVC Capital Partners.

Nick Ogden, the former head of WorldPay and now chief of biometric authentication firm Voice Commerce, has already expressed a firm interest in taking over the business and has been seeking to raise PE funding to back a bid. Other potential tech buyers include Atos Origin.

Quoting unidentified 'City sources', The Times says that RBS has received more than 45 expressions of interest, prompting it to accelerate the sale process, with a formal auction process to be launched within weeks.

Comments: (2)

Roger Elwell
Roger Elwell - Yes Please - Colchester | 14 December, 2009, 16:16

Surely, if RBS ends up having to flog this part of the bank off, it is placed at a competitive disadvantage to other UK commercial banks.  Many commercial clients would expect their bank to offer a service and they won't be able to.

 

Talk about ruining the investment....

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Nigel Beatty
Nigel Beatty - Proxama Digital Payments Division - London | 15 December, 2009, 11:51

The merchant acquiring business is now so competitive that smart businesses do not automatically expect their bankers also to be their acquirers. Those that do are placing themselves at a potential competitive disadvantage by not seeking out the best deal. Of course the best deals are only open to the high volume merchants, but that does not preclude smaller operators from shopping around. However, if RBS's acquiring business (which includes NatWest Streamline) falls into the hands of private equity, one can foresee upward pressure on merchant charges, possible cuts in customer services and probably concentration on the most profitable areas of the business, which will exclude the corner shop...

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