Barclays Plc is exploring the possibility of selling a stake in the unit that processes payments for UK merchants, while the British bank seeks a partner to help grow the company, four people familiar with the matter told Reuters.
The bank plans to bring in a partner with the strategic “know-how” to grow the business and raise money, but has not yet decided on the size of the stake it can sell, these people said.
The company could be valued at at least £2 billion ($2.5 billion), based on estimated earnings before interest, tax, depreciation and amortization (EBITDA) of about £300 million and other similar transactions, one of the people said.
The preliminary talks are part of a review of global payments business, which involves merchant acquisitions and credit card services, said the people, who spoke under the guise of anonymity.
Barclays distributed a presentation of its national Merchant Acquiring Unit to potential bidders — mostly specialist payment providers — this summer, two of the people said, but plans could still be changed or dropped altogether.
A Barclays spokesperson said: “We do not comment on speculation. Our business continues to perform well and growing our global payments business is a priority for us.”
Reuters reported earlier this year that Barclays, led by CEO CS Venkatakrishnan, had launched a review of its global payments footprint as it considers the best way to distribute capital between its divisions and boost share price.
The group hired consultants to prepare separate financial statements for its nationwide Merchant Acquiring business, in an initiative known internally as Project Hyperion, one interviewee said.
This move mirrors the moves of other European lenders who have tried to monetize their payments business, including Spain’s Banco Sabadell and Italy’s Intesa Sanpaolo.
Barclays is also gauging interest in its consumer credit business in Germany, known as Barclaycard Germany. ($1 = £0.7923) (reporting by Amy-Jo Crowley and Pablo Mayo Cerqueiro in London and Milana Vinn in New York; additional reporting by Lawrence White; writing by Elisa Martinuzzi and Susan Fenton)