According to a report in The Financial Times, CD&R has teamed up with GTCR, Global Payments’ largest shareholder, on a joint bid for the payments processor.
- Talks remain ongoing and a deal may not materialize, the report said, while adding that any transaction would likely include a premium to the recent trading price.
- William Blair estimates a take-private could land near $101 per share and said anything higher “feels rich” compared with better-positioned fintech peers.
- In a private-equity scenario, B. Riley sees a wide range of possible outcomes, from a low of $84 to a high of $190.
Shares of Global Payments (GPN) jumped 11% on Friday, clocking its best day since February, after reports that private equity firm Clayton Dubilier & Rice is pursuing a take-private deal for it.
According to a report in The Financial Times, CD&R has teamed up with GTCR, Global Payments’ largest shareholder, on a joint bid for the payments processor. Talks remain ongoing, and a deal may not materialize, the report said, while adding that any transaction would likely include a premium to the recent trading price. Shares of Global Payments closed at $96.84 on Friday, giving the company a market valuation of $25.6 billion.
William Blair Estimates Deal At $101 Per Share
William Blair kept its ‘Market Perform’ rating after the report. The firm called the story “credible,” noting that GTCR owns roughly 15% of Global Payments. The company’s nearly $22 billion of net debt could complicate a leveraged buyout, especially if rates stay elevated, the firm said. Blair estimates a take-private could land near $101 per share and said anything higher “feels rich” compared with better-positioned fintech peers. The firm put the odds of a completed deal “comfortably below” 50%. If a transaction does occur, Blair expects greater pressure on other highly leveraged public fintechs such as Fiserv and Shift4 Payments to sell themselves.
B.Riley Sees A Range Of Possible Outcomes
In a private-equity scenario, B. Riley sees a wide range of possible outcomes, from a low of $84 to a high of $190. It continues to view Global Payments as “materially mispriced,” reiterated its ‘Buy’ rating, and highlighted its $194 price target as the highest on the Street.
How Did GPN Retail Traders React?
On Stocktwits, retail sentiment around GPN stock jumped from ‘neutral’ to ‘bullish’ territory over the past 24 hours, while message volume increased from ‘normal’ to ‘high’ levels.
GPN stock has gained 25% year-to-date after a dip last year when it bought Worldpay from GTCR for more than $24 billion.
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