As the British bank looks for a partner to help develop the company, Barclays Plc (BARC.L) is considering selling a share in the division that handles payments for UK merchants, according to four individuals familiar with the situation who spoke to Reuters.
According to the sources, the bank is thinking of raising funds and bringing on a partner with the “know-how” to develop the company, but it hasn’t decided how much of a share it will sell.
Based on expected profits before interest, tax, depreciation, and amortisation (EBITDA) of roughly 300 million pounds and comparable acquisitions, one of the persons said the company might be valued at at least 2 billion pounds ($2.5 billion). The sources, who spoke on the condition of anonymity, said the early-stage conversations are a part of a study of its worldwide payment business, which include merchant acquiring and credit card services.
Two of the persons claimed that over the summer, Barclays gave a presentation on its domestic merchant acquisition arm to prospective bidders, mostly specialised payment firms. However, plans may yet be changed or abandoned completely.
We don’t comment on speculative claims, according to a Barclays spokeswoman. Our companies are doing well, and one of our top priorities is expanding our worldwide payments business. Earlier this year, Reuters reported that Barclays, under the leadership of Chief Executive CS Venkatakrishnan, had begun a review of its worldwide payments footprint as it deliberated how to most effectively divide money across its businesses and raise its share price.
In a programme known internally as Project Hyperion, the business hired experts to create separate financials for its domestic merchant purchasing activity, one of the sources said.
It mimics actions taken by other European bankers including Spain’s Banco Sabadell and Italy’s Intesa Sanpaolo who have aimed to monetize their payment operations.
Additionally, Barclays is testing interest in Barclaycard Germany, its consumer financing business in Germany.
