Elliott Management Takes Big Stake in Global Payments Amid Share Price Decline

Elliott Management, a hedge fund, has acquired a significant stake in Global Payments following its $24.2B takeover of Worldpay. The activist fund's demands and the size of its interest are unknown. The move aims to help Global Payments win back investors whose shares plummeted after the acquisition.

Shares of Global Payments (NYSE: GPN) surged over 6% in premarket trading on Wednesday following reports that activist investor Elliott Investment Management has acquired a significant stake in the fintech company. The exact size of Elliott's holding and its intentions for the company remain unclear, according to sources familiar with the situation [1].

This development comes less than three months after Global Payments completed its $24.3 billion purchase of Worldpay from FIS and private equity firm GTCR. The acquisition, which involved selling Global Payments' card processing and account services business to FIS, has drawn skepticism from analysts due to the company's previous plans to divest assets and return capital to shareholders [2].

Global Payments' share price has fallen more than 30% year-to-date, though it has gained slightly more than 1% over the past month. Jefferies analysts commented that while the stock appears "objectively cheap," trading below six times forward earnings estimates, they "do not see an obvious activist playbook" guiding Elliott’s investment. The analysts noted that Elliott's previous involvement with payments firm PayPal (NASDAQ: PYPL) centered on cost reductions and better capital allocation, but given Global Payments’ strong balance sheet and healthy margins, those "are not potential levers" available to Elliott in this case [1].

The investment by Elliott Management comes as Global Payments navigates investor concerns following its $24.2 billion acquisition of Worldpay. The exact demands from Elliott Management and the size of its stake in Global Payments have not been disclosed [2]. The move aims to help Global Payments win back investors whose shares plummeted after the acquisition.

References:
[1] https://ih.advfn.com/market-news/article/12774/global-payments-shares-climb-amid-reports-of-elliott-stake-post-worldpay-acquisition
[2] https://za.investing.com/news/stock-market-news/global-payments-stock-rises-after-ft-report-elliott-management-builds-stake-93CH-3790572