Exclusive: Barclays explores sale of stake in $2.5 billion UK payments unit

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A Barclays bank building is seen at Canary Wharf in London
A Barclays bank building is seen at Canary Wharf in London, Britain May 17, 2017. REUTERS/Stefan Wermuth/ File Photo Purchase Licensing Rights, opens new tab
LONDON/NEW YORK, Sept 4 (Reuters) - Barclays Plc (BARC.L), opens new tab is exploring the sale of a stake in the unit that processes payments for UK merchants as the British bank seeks a partner to help grow the business, four people familiar with the matter told Reuters.
The bank is considering bringing in a partner with the strategic "know-how" to expand the business, as well as raising capital, but has yet to decide how big a stake it might sell, said the people.
The business could be valued at at least 2 billion pounds ($2.5 billion), based on estimated earnings before interest, tax, depreciation and amortisation (EBITDA) of about 300 million pounds and similar deals, one of the people said.The early-stage discussions are part of a review into its global payment activities spanning merchant acquiring and credit card services, said the people, who spoke on condition of anonymity.
Barclays distributed a presentation on its domestic merchant acquiring unit to potential bidders - mainly specialist payments providers - over the summer, two of the people said, but plans may still be altered or dropped entirely.
A spokesperson for Barclays said: "We don't comment on speculation. Our businesses continue to perform well and growing our global payments business is a priority for us."
Reuters reported earlier this year that Barclays, led by Chief Executive CS Venkatakrishnan, had launched a review of its global payments footprint as it debates how to best allocate capital among its divisions and boost its share price.
The group drafted in consultants to prepare separate financials for its domestic merchant acquiring operation in an initiative known internally as Project Hyperion, one of the people said.
It mirrors moves by other European lenders which have sought to monetise their payments operations, including Spain's Banco Sabadell and Italy's Intesa Sanpaolo.
Barclays is also gauging interest in its German consumer finance operations, known as Barclaycard Germany.
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Reporting by Amy-Jo Crowley and Pablo Mayo Cerqueiro in London and Milana Vinn in New York; Additional reporting by Lawrence White; Editing by Elisa Martinuzzi and Susan Fenton

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As part of Reuters' Deals team, Pablo covers equity capital markets transactions across Europe, the Middle East and Africa, from initial public offerings to capital increases. He also covers M&A, with a particular focus on financial institutions such as banks and insurers, as well as private equity. He previously worked at Mergermarket, Euromoney and Spanish digital media.

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Milana Vinn reports on technology, media, and telecom (TMT) mergers and acquisitions. Her content usually appears in the markets and deals sections of the website. Milana previously worked at GLG and PE Hub, where she spent several years covering TMT deals in private equity. She graduated from CUNY Graduate School of Journalism with Masters in Business Journalism.

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