RBS inundated with WorldPay offers

RBS inundated with WorldPay offers

Royal Bank of Scotland has received over a dozen bids for its Global Merchant Services business, which includes WorldPay, with private equity groups, payment processors and IT vendors all in the frame.

WorldPay's founder Nick Ogden has teamed with backers to make an offer, through his Voice Commerce Group, ahead of yesterday's deadline for the unit he sold to RBS in 2002.

According to press reports, French vendor Atos Origin has also made a bid while US processor Tsys is understood to have teamed with private equity group Silver Lake Partners on an offer. JPMorgan's Chase Paymentech has also expressed interest.

Advent International, which last year acquired a 51% stake in the payments processing business of Fifth Third Bancorp, has reportedly teamed with fellow private equity firm Bain on a bid.

Another buyout firm that already has an interest in the payments processing area, Kohlberg Kravis Roberts, has also been touted as a bidder. KKR took over US giant First Data in 2007 in a $29 million deal.

Blackstone, Carlyle, CVC Capital Partners, Permira, TPG and Warburg Pincus have all also been reported as bidders.

WorldPay made an operating profit of £276 in 2008 and is seen as an attractive proposition for private equity firms because of its high levels of recurring revenues.

Any deal is expected to value the business at between £2 billion and £3 billion. RBS has agreed to provide vendor financing and is prepared to retain a 20% stake in the unit, depending on the bids.

Meanwhile, Ogden's Voice Commerce, has become the first payments institution under the Payments Services Directive (PSD), to become a principal member of Visa Europe. The membership means Voice Commerce can start providing its own payment services to businesses including acquiring transactions.

"As a Payment Institution, Voice Commerce is regulated in exactly the same way as banks in relation to capital adequacy and regulatory responsibilities for payment services. Being granted Visa membership means we can further compete on an equal footing across Europe with our banking peers," says Ogden.

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