France's Ingenico targeted by Natixis, Edenred in payments deal flurry

* Edenred, Natixis express Ingenico interest -sources

* Ingenico shares surge 10 percent

* Natixis and Edenred shares fall

* Ingenico has been subject of bid interest before

* Payments sector has seen several M&A deals

* Ingenico failed to buy Worldline in 2015 (Updates with Edenred interest)

By Cyril Altmeyer and Pamela Barbaglia

PARIS/LONDON, Oct 11 (Reuters) - Ingenico is being pursued by business services company Edenred and corporate banking group Natixis as consolidation in the payments field heats up.

"Natixis and Edenred both sent letters expressing interest in Ingenico at the beginning of the summer. Ingenico is having conversations with Natixis but hasn't started talking to Edenred", a source told Reuters on Thursday.

French group Ingenico, which has a 4 billion euro ($4.6 billion) stock market value and has been a takeover target before, confirmed it had received "preliminary approaches for a strategic transaction", without saying who from.

Growing use of smartphones to make online payments has triggered consolidation, despite increasing regulatory scrutiny of the sector, with deals offering potential cost savings.

Worldline bought the payments unit of Swiss exchange operator SIX Group in May, and Nets merged with German peer Concardis in June. Ingenico tried unsuccessfully to buy Worldline in 2015.

Meanwhile, private equity firm CVC abandoned talks with Ingenico, sources told Reuters in August, while U.S. company Danaher also failed to buy it in 2010.

Natixis, which has a stock market value of 18 billion euros and is part of French bank BPCE, said on Thursday it was examining merging its payments business with Ingenico.

An official at Edenred, which has a market capitalisation of around 7.5 billion euros, said it did not comment on rumours.

A second source said that he expected a bidding war between Natixis and Edenred, with the latter preparing a firm offer.

INGENICO SHARE BOOST

Shares in Ingenico, which were hit in July after it issued a profit warning due to adverse exchange rates and having to quit Iran, jumped by around 10 percent on Thursday.

Edenred shares were down by 1.9 percent, while Natixis shares fell 5.2 percent.

Backing from the French government is seen as key to the success of any bid for Ingenico, which France's industry minister in 2010 described as essential to its electronics industry and which is 5 percent owned by French state bank BPI.

Analysts at brokerage Jefferies said buying Ingenico could prove tricky for Natixis, with both its relative size and the potential return for the French bank both likely challenges.

Natixis said it was sticking to a "strong financial discipline" regarding any deals or investments, while Ingenico said it was reviewing its options. ($1 = 0.8666 euros) (Additional reporting by Sudip Kar-Gupta; Editing by Dominique Vidalon/Emelia Sithole-Matarise/Alexander Smith)

First Published: 2018-10-11 08:54:25
Updated 2018-10-11 13:38:54


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