As the British bank looks for an investor to help grow the business, Barclays Plc (BARC.L) is considering selling a stake in the division that handles payments for UK merchants.
According to the people, the bank is thinking of raising funds and bringing on an investor with the “expertise” to expand the company, but it hasn’t decided how much of a stake it will sell.
Based on expected profits before interest, tax, depreciation, and amortization (EBITDA) of roughly 300 million pounds and comparable acquisitions, one of the persons said the company might be priced at a minimum of 2 billion pounds ($2.5 billion).The people, who spoke on the condition of anonymity, said the early stages discussions are a part of a study into its worldwide payment activities, which include merchants acquisition and credit card services.
Two of the people claimed that over the summer, Barclays gave an overview on its national merchant acquisition unit to prospective bidders, mostly specialized payment firms. However, plans may yet be changed or abandoned entirely.
They aren’t commenting on speculative claims, according to a Barclays spokeswoman. Our businesses 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 its CEO CS Venkatakrishnan, had begun a review of its worldwide payment footprint as it deliberated how to most effectively divide capital across its divisions and raise its share price.
In a program dubbed informally as Project Hyperion, the group hired consultants to create distinct finances for its local merchant acquiring activity, one of the sources said.
It mimics actions taken by other European bankers such as the Spanish Banco Sabadell & Italy’s Intesa Sanpaolo who have aimed to monetize their payment operations.
Additionally, Barclays is testing interest in Barclaycard Germany, its consumer financing operations in Germany.