by Florence Loeve and Amy-Jo Crowley

PARIS (Reuters) – French digital payments group Worldline has mandated an investment bank to sell its Mobility & Transactional Web Services (MTS) activities, five sources familiar with the matter told Reuters.

The plan to sell the MTS branch, internally called the “Manhattan project”, had already been discussed at a meeting of the board of directors this summer, indicated two of these interlocutors. It should continue despite the departure of general manager Gilles Grapinet, announced in September.

Worldline management is working with investment bank Rothschild to find buyers, two of the sources told Reuters.

The French group is expected to auction MTS this year, but the process is only at the beginning and the sale is not guaranteed, said these sources, who spoke on condition of anonymity.

When contacted, Worldline and Rothschild declined to comment.

The MTS division generated an adjusted EBITDA (gross operating surplus) of 48.2 million euros in 2023. It brings together various activities, and offers, among other things, solutions for payment and digital ticketing in transport as well as to dematerialize secure data.

The subject of a potential sale of MTS is not new at Worldline. “MTS has been saying for years that one day it will be sold,” said a source familiar with the matter. Internal questions on this subject were fueled in particular by the development of Worldline’s cost reduction plan, Power24, launched in February 2024.

The group, whose stock has lost around 60% of its value since the start of the year, is seeking to regain investor confidence.

REFORCEMENT EFFORT

According to two Reuters interlocutors, a sale of MTS would be facilitated by the fact that this branch operates fairly “autonomously” within Worldline, and has its own customer base.

One of these people familiar with the subject believes that MTS’ activities do not correspond to Worldline’s “core business”, and that its margin is relatively lower than that of the group’s other two branches.

From the end of 2023, the activist fund Bluebell, shareholder of Worldline, had asked management to sell the “Mobility & Transactional Web Services” entity, considered too distant from the rest of the company.

During a conference call to present third-quarter revenue last Wednesday, interim CEO Marc-Henri Desportes said the group was beginning a “process of optimizing its portfolio to focus [ses] investments where they are most useful”, specifying that it was too early to name the activities concerned.

In a note published on Wednesday, Citi analysts highlighted that “management reiterated its objective of reducing non-synergistic and underperforming activities (in terms of growth or margin) which represent approximately 10% of turnover”.

Also contacted, the French public bank Bpifrance, shareholder of Worldline, did not wish to comment.

(Reporting by Florence Loève, Gianluca Lo Nostro, Amy-Jo Crowley and Mathieu Rosemain, editing by Kate Entringer)

Copyright © 2024 Thomson Reuters