Worldpay/Vantiv deal analyzed; AIG hires a COO

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Worldpay/Vantiv assessed: Vantiv’s proposed acquisition of British payments processor Worldpay “has merit, but also risks,” the Financial Times reports, while retracing the company’s acquisitive history since it began as a division of Fifth Third Bank. The Worldpay deal is by far its biggest bet.

The New York Times, meanwhile, is skeptical there will be “substantial” potential cost savings from the deal to justify the nearly $10 billion that Vantiv is offering. Plus “there are a couple of other niggling concerns,” it says. “One is why JPMorgan decided not to bid. Another is that Vantiv’s chief executive, Charles Drucker, and his Worldpay peer, Philip Jansen, will jointly run the company. Such setups can be a recipe for conflicts and muddled visions.”

Building the team: American International Group’s new CEO Brian Duperreault has hired Peter Zaffino, the former head of Marsh & McLennan’s brokerage unit and chairman of the company’s risk and insurance-services operation, to be executive vice president and global chief operating officer at AIG. Duperreault was CEO of Marsh & McLennan from 2008 to 2012; Zaffino is his first significant hire since joining AIG last month. AIG’s current COO, Jeffrey Hurd, is leaving the insurance giant at the end of the month. Wall Street Journal, Financial Times, New York Times

Happy to stay: Lloyds Banking Group CEO António Horta-Osório announced a major front office shake up at the British bank, indicating he doesn’t plan to leave anytime soon. The reshuffle “sees key lieutenants to Horta-Osório handed extra responsibilities, evidence of the Portuguese financier’s desire to tighten his grip at the lender’s helm,” the Wall Street Journal comments. “The moves follow months of speculation that Mr. Horta-Osório, having overseen the successful privatization of Lloyds, would leave the bank to join a rival or pursue a career outside finance.” Wall Street Journal, Financial Times

Don Ventre

Wall Street Journal
Selling Simon: Goldman Sachs is looking to sell a stake in Simon, its online marketplace for structured notes, as a prelude to eventually spinning off the business. “Bringing in outside investors could bolster Simon’s credibility as a neutral platform and give it an edge in a growing crowd of tech-enabled competitors,” the paper says. Simon “has done well with retail brokers who buy these products but has been slower to take off among banks that issue them — Goldman’s rivals.”

Threat warning: The Financial Stability Board says more work needs to be done to address the decline in correspondent banking relationships and the associated risks from the trend. “An inability to make international payments hinders businesses’ ability to settle trade deals, causes financial isolation in certain jurisdictions, and potentially drives some flows into a shadow banking system,” says the report, which was prepared for the Group of 20 meeting in Germany this week. “This poses a threat to the stability and integrity of the financial system.”

Come on over: Using cheap rents and bonus protections as lures, European regulators and government officials are trying to convince London-based financial companies to move before Brexit takes effect. “The jockeying is fostering tension among European regulators and raising concerns that risk is being siphoned unchecked into the trade bloc,” the paper reports.

Quotable
“We view Worldpay as a potential strategic asset for Vantiv due to its ecommerce platform as well as the geographic footprint it would add. However, we note that an acquisition of Worldpay would come with some challenges as well as the company continues to struggle with its U.S. division, driven in part by delays tied to its platform migration.” — Analysts at Barclays.