|Bid||168.70 x N/A|
|Ask||169.10 x N/A|
|Day's Range||163.75 - 169.10|
|52 Week Range||90.54 - 169.15|
|Beta (5Y Monthly)||1.56|
|PE Ratio (TTM)||26.84|
|Earnings Date||Feb 19, 2021|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Mar 26, 2020|
|1y Target Est||394.43|
(Bloomberg Opinion) -- Mashing together the plumbing of the payments industry has provided a steady stream of deals for bankers. With Nexi SpA inking its agreement to buy Nets S/A over the weekend, the European sector now looks to be coalescing around two players, one French and one Italian. But this is probably only the end of the beginning for consolidation.Nexi’s combination with private-equity-owned Nets, plus its recent deal to buy SIA in Italy, will create a company with an enlarged market value implicitly north of 20 billion euros ($24 billion). French rival Worldline SA, which agreed to buy domestic peer Ingenico SA earlier this year, is likewise worth around 20 billion euros. Lots of smaller deals by these various companies have created what now appears to be a neatly concentrated listed sector. But that doesn’t mean the dealmaking is over.The U.K. has been oddly left out of the action despite London being Europe’s financial center. The emergence of sizeable European payments firms has arguably been a missed opportunity for the likes of Barclays Plc, Lloyds Banking Group Plc and Natwest Group Plc, the original owner of Worldpay, now part of Fidelity National Information Services Inc. Worldpay could have chosen to be a European consolidator, but instead pivoted to the U.S. and global e-commerce, and was soon gobbled up.Barclays’s payments assets could potentially be a platform on which to build. But for now, London’s interest in this story is mainly about the teams at private equity firms Advent International Plc, Bain Capital and Hellman & Friedman that have led the growth of Nexi and Nets. Buyout firms will still own a significant minority holding in Nexi after its recent transactions and they have agreed to lengthy lockups.For all of the activity, the European payment market remains fragmented. The major U.K., French and Spanish banks sit on platforms that would make logical disposal candidates at the right price. It’s not easy for them to commit capital to these operations and lead expansion by acquisition.So there’s probably no shortage of available transactions to fuel continued expansion at Nexi and Worldline — or even a fresh roll-up vehicle. Nexi’s pro-forma leverage, while high on a snapshot basis at over three times Ebitda, is expected to fall to 2-2.5 times Ebitda in 2022. That suggests its main constraint to doing more deals will be the demands on management rather than financial firepower.The valuations available for selling payments assets continue to advance. Nexi and Fidelity National have gone from trading at mid-teens multiples of forecast Ebitda to almost 20 times in the last year.Vendors will be increasingly wary of risking looking like fools for selling assets at prices that look too cheap later. But the temptation to cash in at these levels will remain strong. The payments M&A merry-go-round spinning for a while yet.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- A takeover offer that would have been so-so in February becomes impossible to refuse for a company whose shares have been hit by the pandemic. The 7.2 billion-pound ($9.5 billion) approach for RSA Insurance Group has been shrewdly pitched by the Canadian-Danish consortium trying to buy the FTSE-100 insurer.RSA has been led by Stephen Hester since 2014. This particular chief executive role always seemed a little low profile for the former Credit Suisse Group AG investment banker, who previously took charge of Natwest Group Plc (then Royal Bank of Scotland) during the financial crisis. Few will be surprised that a good tenure would culminate in a deal.The 685 pence-a-share price mooted by Toronto-based insurer Intact Financial Corp. and Denmark’s Tryg A/S is a 51% premium over RSA’s three-month average. Ordinarily, such terms would be hard for a board to reject and RSA says the price is acceptable — although some of the details, notably funding the pension, need resolving to transform what is currently a proposal into a binding offer.Yet RSA shares have fallen sharply during the pandemic. That could provide some grounds for claiming the consortium is being opportunistic. The bid proposal, revealed by Bloomberg News, is a less appealing 18% premium to where the shares were in February. All the same, that remains a good outcome for shareholders. The coronavirus’s impact cannot simply be imagined away: The bill for claims on business continuity insurance remains uncertain. Other takeover targets have had to fight to get bidders to meet even their pre-Covid share prices. The price here equates to 15 times next year’s expected earnings, a valuation the shares haven’t traded at since 2016.If a takeover on these terms looks like it’s worth more than the standalone option, the trickier question is whether there’s potentially a better alternative tie-up. RSA has long been talked of as a bid target. Zurich Insurance Group AG scrapped an attempted deal in 2015. RSA has remained independent because there aren’t many buyers who want its unusual bundle of U.K., Scandinavian and Canadian assets. Now that puzzle has been solved by bringing together a Canadian and Danish buyer in a joint bid, who would carve up the business between them.There are other theoretical combinations. RSA’s domestic peer Aviva Plc is retrenching internationally to focus on the U.K., Ireland and Canada. But it’s hard to see how it could assemble an offer on its own with a comparable premium, let alone 100% in cash as here. The big European insurers — Allianz SE, Axa SA and Zurich — may not have as much firepower as one would imagine. Allianz on Friday scrapped a share buyback to conserve capital. These usual suspects may hesitate to enter a public auction against a consortium with plausible synergy potential when the starting price is already high.RSA doesn’t have a firm deal yet. But at this level, it would be wise to dot the i’s and extract a binding offer here. And if there’s a better bid out there, let the market do the work of bringing it to the fore.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
NatWest shares were the best performers in London on Friday, as the U.K. bank rounded off a week of upbeat results from the sector.