Key Takeaways
- • Global Payments (GPN) shares jumped 11% on Friday, their best day since February, after The Financial Times reported that Clayton Dubilier & Rice (CD&R) is pursuing a take-private deal with GTCR, the payments processor's largest shareholder.
- • Shares closed at $96.84, implying a market valuation of $25.6 billion; the report said talks remain ongoing and a deal may not materialize, with any transaction likely carrying a premium to recent trading prices.
- • William Blair kept its 'Market Perform' rating and estimates a take-private could land near $101 per share, calling higher prices 'rich' versus better-positioned fintech peers, and put odds of a completed deal 'comfortably below' 50%.
- • B. Riley reiterated its 'Buy' rating and sees a private-equity valuation range of $84 to $190, citing a $194 price target, the highest on the Street.
- • GPN's nearly $22 billion of net debt could complicate a leveraged buyout, particularly if interest rates remain elevated, according to William Blair.
Summary
Shares of Global Payments (GPN) rose 11% on Friday, posting their strongest session since February, after a Financial Times report that private equity firm Clayton Dubilier & Rice (CD&R) has teamed with GTCR, Global Payments' largest shareholder, on a joint bid for the company. According to the report, talks remain ongoing and a deal may not materialize, though any transaction would likely include a premium to the recent trading price. GPN closed Friday at $96.84, giving the company a market valuation of $25.6 billion.
William Blair maintained its 'Market Perform' rating following the report, calling the story "credible" given GTCR's stake of roughly 15%. The firm noted that Global Payments' nearly $22 billion of net debt could complicate a leveraged buyout, especially if rates stay elevated. William Blair estimates a take-private could land near $101 per share and said anything higher "feels rich" compared with better-positioned fintech peers. It placed the odds of a completed transaction "comfortably below" 50%. If a deal occurs, William Blair expects increased pressure on other highly leveraged public fintechs, including Fiserv and Shift4 Payments, to explore sales.
B. Riley, in a private-equity scenario, sees a wide range of potential outcomes from a low of $84 to a high of $190 per share. The firm continues to view Global Payments as "materially mispriced," reiterated its 'Buy' rating, and highlighted its $194 price target, the highest on the Street.
On Stocktwits, retail sentiment on GPN shifted from 'neutral' to 'bullish' over the prior 24 hours, while message volume rose from 'normal' to 'high.' GPN shares have gained 25% year-to-date, following a dip last year after the company acquired Worldpay from GTCR for more than $24 billion.
William Blair maintained its 'Market Perform' rating following the report, calling the story "credible" given GTCR's stake of roughly 15%. The firm noted that Global Payments' nearly $22 billion of net debt could complicate a leveraged buyout, especially if rates stay elevated. William Blair estimates a take-private could land near $101 per share and said anything higher "feels rich" compared with better-positioned fintech peers. It placed the odds of a completed transaction "comfortably below" 50%. If a deal occurs, William Blair expects increased pressure on other highly leveraged public fintechs, including Fiserv and Shift4 Payments, to explore sales.
B. Riley, in a private-equity scenario, sees a wide range of potential outcomes from a low of $84 to a high of $190 per share. The firm continues to view Global Payments as "materially mispriced," reiterated its 'Buy' rating, and highlighted its $194 price target, the highest on the Street.
On Stocktwits, retail sentiment on GPN shifted from 'neutral' to 'bullish' over the prior 24 hours, while message volume rose from 'normal' to 'high.' GPN shares have gained 25% year-to-date, following a dip last year after the company acquired Worldpay from GTCR for more than $24 billion.
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