LONDON/ZURICH (Reuters) - Three bidders including a consortium of French bank Natixis (CNAT.PA) and buyout fund Warburg Pincus [WP.UL] are vying to buy the payments unit of the Swiss stock exchange operator SIX Group, three sources familiar with the matter told Reuters.
U.S. buyout fund Hellman & Friedman, which controls Danish payments firm Nets (NTTSY.PK), and French payments group Worldline (WLN.PA) are also lining up rival bids for the business before an April 27 deadline, the sources said.
The auction, led by JPMorgan, was expected to wrap up in early May with one of the three bidders likely to enter exclusive talks with SIX’s investors next week, they said.
SIX, Natixis and Worldline declined to comment, while Hellman & Friedman and Warburg Pincus were not immediately available.
The Swiss firm, which helps process payments and provides debit and credit card terminals to retailers, restaurants and hotels, says it is the market leader in Switzerland, Austria and Luxembourg.
It launched a strategic review in September in a bid to find a partner to boost growth in a fragmented market.
SIX’s investors want to retain some exposure to the combined entity and have asked bidders to outline plans that would see SIX playing an active role in a bigger company.
“This is not an outright sale,” one of the sources said. “SIX’s investors will have the option to contribute into a new entity.”
The unit, whose clients include retailers Migros and Coop and some European airports such as Amsterdam and Vienna, was valued at between 1.5 billion and 2 billion Swiss francs ($1.5 billion to $2 billion), the sources said.
The sale comes amid a wave of mergers and acquisitions in the payments industry as consumers increasingly switch to card and mobile payments and a series of newcomers try to disrupt the way merchants get paid.
Other recent transactions include the multi-billion pound sale of Britain’s Worldpay and Paysafe last year.
Under the plan crafted by Natixis and Warburg Pincus, SIX would secure access to the French market and would control 50 percent of a new payments business to be launched in tandem with Natixis, the sources said.
Hellman & Friedman’s bid would involve merging SIX with its portfolio company Nets, which ranks as the biggest issuer of Denmark’s most widely used debit cards.
Nets, which previously traded in Copenhagen, was bought last year in a deal valuing the firm at 33.1 billion Danish crowns ($5.4 billion).
Hellman & Friedman wanted to offer SIX a minority stake in the merged entity, the sources said, adding the deal would provide access to the mature Nordics market where credit card penetration tends to be higher than in other EU countries.
France’s Worldline had also made it to the final stages of the auction but its offer was seen as less competitive, the sources said, without providing details.
($1 = 6.1172 Danish crowns)
($1 = 0.9843 Swiss francs)
Additional reporting by Arno Schuetze in Frankfurt and David French in New York; Editing by Edmund Blair