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HomeBusinessBarclays explores sale of stake in $2.5 bln UK payments unit

Barclays explores sale of stake in $2.5 bln UK payments unit

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Barclays Plc is exploring the sale of a stake in the unit that processes payments for UK merchants as the British bank seeks a partner to help grow the business, four people familiar with the matter told Reuters.

The bank is considering bringing in a partner with the strategic “know-how” to expand the business as well as raising capital but has yet to decide how big a stake it might sell.

The business could be valued at at least 2 billion pounds ($2.5 billion) based on estimated earnings before interest, tax, depreciation, and amortization (EBITDA) of about 300 million pounds and similar deals, one of the people said.

The early-stage discussions are part of a review of its global payment activities, which span merchant acquisition and credit card services, said the people, who spoke on condition of anonymity.

Barclays distributed a presentation on its domestic merchant acquiring unit to potential bidders—mainly specialist payments providers—over the summer, two of the people said, but plans may still be altered or dropped entirely.

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A spokesperson for Barclays said, “We don’t comment on speculation. Our businesses continue to perform well, and growing our global payments business is a priority for us.”

Reuters reported earlier this year that Barclays, led by Chief Executive CS Venkatakrishnan, had launched a review of its global payments footprint as it debated how to best allocate capital among its divisions and boost its share price.

One of the people said the group drafted in consultants to prepare separate financials for its domestic merchant acquisition operation in an initiative known internally as Project Hyperion.

It mirrors moves by other European lenders that have sought to monetise their payment operations, including Spain’s Banco Sabadell and Italy’s Intesa Sanpaolo.

Barclays is also gauging interest in its German consumer finance operations, known as Barclaycard Germany.

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