So, could WorldLine be a potential acquirer of ISX? Seems they are keen to expand via acquisition, and the likes of Macquarie Bank feel they are likely to be the dominant player in the payments sector. With EU1.2ln in cash they could certainly afford to buy:
Worldline Can Dominate Payments Market With More M&A: Macquarie
By William Canny
(Bloomberg) --
Taking a lead from the U.S., the European payments industry should consolidate into a smaller number of processors with larger scale/margins, Macquarie says in note, suggesting Worldline (outperform) could “dominate” the market as it continues its deal-making strategy to boost shareholder value.
Capital Markets Day inspired confidence in the company’s long-term position in a consolidating market
Notes that payments deals have large cost-saving potential given the high operating leverage in the sector
Worldline has an acquisition model that allows it to take out 80% of the target company’s costs
Company’s large cash pile of >EU1.2b means it can make acquisitions without diluting shareholders
Raises PT to EU41.77 from EU38.22, sees large acquisition toward end of 2017 as price catalyst
Wordline shares fall 0.7%; up 48% YTD
ISX Price at posting:
18.0¢ Sentiment: Buy Disclosure: Held
