Elliott Management Invests in Global Payments Amid Shareholder Backlash

Elliott Management, an activist hedge fund, has acquired a significant stake in Global Payments. The investment follows the company's $24.2bn acquisition of Worldpay, which led to investor backlash and a 10-year low for shares. Elliott's stake may influence the integration of Worldpay, and the deal's structure avoids a shareholder vote. Global Payments had previously announced plans to focus on divestments and shareholder returns, but the acquisition pushed shares to a 10-year low.

Elliott Management, a prominent activist hedge fund, has reportedly acquired a "sizeable stake" in Global Payments, according to sources cited by the Financial Times [1]. This investment comes on the heels of Global Payments' $24.2 billion acquisition of Worldpay, which has faced investor backlash and pushed shares to a ten-year low [1].

The payment processor, Global Payments, had previously announced plans to focus on divestments and shareholder returns, but the Worldpay acquisition led to a significant drop in share price. The deal, which involves a cash-and-shares arrangement with GTCR and Fidelity Information Services (FIS), saw Global Payments' capital returns reduced and debt increased to fund the transaction [1].

Elliott Management, known for stakes in BP and Hewlett Packard Enterprise, has not revealed the size of its stake or its intentions. However, the investment firm's involvement may influence the integration of Worldpay, as the deal's structure avoids a shareholder vote [1]. In May, Global Payments' CEO Cameron Bready linked the market's negative reaction to the deal's timing, following US President Donald Trump's tariff announcements [1].

Shares of Global Payments surged over 6% in premarket trading on Wednesday following the reports of Elliott's stake [2]. Analysts at Jefferies 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 [2]. The exact size of Elliott's stake and its intentions remain unclear [2].

The investment by Elliott Management adds another layer of complexity to Global Payments' post-acquisition integration and shareholder relations. As the company navigates through the challenges of integrating Worldpay and managing its debt, the influence of an activist investor could potentially steer the company's strategic direction.

References:
[1] https://finance.yahoo.com/news/elliott-management-reportedly-invests-global-105252162.html
[2] https://ih.advfn.com/market-news/article/12774/global-payments-shares-climb-amid-reports-of-elliott-stake-post-worldpay-acquisition