If the Vantiv-Worldpay merger goes ahead, Worldpay shareholders would own approximately 41 percent of the share capital of the combined group on a fully diluted basis. Including a 5.0p per share planned dividend, the total value would be 385p per Worldpay share, or GBP7.70 billion for all of Worldpay's equity.
Vantiv and Worldpay said they have identified "substantial" opportunities for cost synergies, without disclosing how much or where they are.
Shares in payment processor Worldpay jumped 9% in early trade after a report suggested it could be a bid target.
The agreement came a day after shares in the British firm soared more than 25 percent when said it had received approaches from both Vantiv and JPMorgan, although the USA bank said yesterday it does not plan to make an offer. The company says that its business will cover the US, Europe, Asia-Pacific and South America, "including numerous world's largest e-commerce merchants, and a substantial base of merchants of all sizes in Europe and the US".
Several other equities research analysts also recently commented on WPG.
Vantiv and JP Morgan now have until August 1 to announce firm intentions to buy or else walk away.
While combining Worldpay with either JPMorgan or Vantiv would bring efficiency from sharing operations, it could also help the companies to "mount a more robust defense to new kids on the block", O'Sullivan added. Four Worldpay directors will join the board of the new group, including Philip Jansen as co-chief executive and Sir Michael Rake, BT chairman and former Barclays deputy chairman, in a non-executive role.
Worldpay Group plc is a United Kingdom company, which provides a range of technology-led payment services and products. But the potential benefit of buying the online-payments firm easily outweighs the dubious value of giving free advice in the hope of winning lucrative business later. It was snapped up by Bain Capital and Advent in 2010 after the Royal Bank of Scotland had to sell off the division as effect of its Government bailout in 2008.
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