Nexi SpA jumped as much as 19% after people with knowledge of the matter said CVC Capital Partners is in the early stages of considering a potential bid for European payments firm.
The buyout group has been evaluating Nexi for some time, the people said, asking not to be identified because the information is private. Shares in Nexi hit an intraday record in early trading on Wednesday. The stock was up 19% at 10:04 a.m. in Milan, giving the company a market value of €8.9 billion ($9.4 billion).
Other investment firms have also been studying Nexi, the people said. Buyout funds could end up partnering on a joint bid for the company given the size of the potential deal, some of the people said. Deliberations are ongoing, and there’s no certainty they will proceed with formal proposals.
After a slump in dealmaking, private equity firms are starting to regain the confidence to explore larger transactions. Blackstone Inc. and Permira are pursuing a potential take-private of Adevinta ASA, a European classifieds company with a market value of $12 billion.
Payments firms have proved to be popular targets. In June, Brookfield Asset Management Ltd. agreed to acquire London-listed Network International Holdings Plc for about £2.2 billion ($2.7 billion) to expand its presence in credit card processing in the Middle East. A month later, GTCR struck a deal for a majority stake in Worldpay, the Fidelity National Information Services Inc. unit handling card payments for businesses across the world.
Private equity-backed Nexi has grown rapidly through a series of acquisitions in recent years to become one of the biggest players in the European payments industry. Its major shareholders include Hellman & Friedman, as well as a vehicle backed by Bain Capital and Advent International, according to data compiled by Bloomberg.
It’s unclear whether Nexi’s owners would be open to a sale in the near term given the depressed valuation. Representatives for CVC, Nexi, Advent and Hellman & Friedman declined to comment, while a spokesperson for Bain didn’t immediately respond to a request for comment.
Italian lender Cassa Depositi e Prestiti SpA, which is controlled by the country’s government, holds a roughly 13.5% stake in Nexi, which it acquired under a previous administration. In its first year in power, current Prime Minister Giorgia Meloni’s government has shown a hands-on approach to companies, seeking to retain a direct control in businesses even when they’re at the center of a deal, and favoring domestic buyers over foreign interests.
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--With assistance from Sonia Sirletti, Swetha Gopinath and Manuel Baigorri.
Author: Jan-Henrik Förster, Daniele Lepido, Dinesh Nair and Ruth David