BPER, Nexi extend further talks on retailers’ payment business

MILAN (Reuters) -BPER Banca said on Monday it had granted payments group NEXI a further extension of exclusive talks over the sale of the Italian bank’s retailers’ payment business.

BPER Banca, Italy’s fifth-largest bank, in February received a non-binding offer from NEXI for the business, which one source had earlier said could be worth around 350 million euros ($364 million).

The latest extension pushed back the deadline to reach an accord to May 31, with two sources close to the discussions saying there were no major issues threatening the negotiations.

Italy’s NEXI already runs BPER’s shop payments services through a commercial partnership.

“Negotiations between the parties are still in progress and BPER Banca will inform the market when a binding agreement is reached,” the lender said.

It had initially granted NEXI two months of exclusive talks and then agreed to a first extension that expired on Sunday.

Shares in Nexi closed down 4.7% on Monday, compared to a flat Italian blue chip index, after hitting a two-year low during in the session.

Shares in Nexi’s main European rival Worldline fell 2.2% on Monday.

Nexi has lost more than 8% since reporting first quarter results last week, while Worldline is up nearly 3% since the end of April when it published quarterly earnings.

“Due to one-off project revenues in the prior year, Nexi did not follow other global in-store acquirers in materially beating merchant services revenues, despite a strong volume recovery,” Barclays analysts said in a note.

Nexi’s revenue rose 7.1% year-on-year in the first quarter with half of the turnover coming from its Merchant Services & Solutions division.

Barclays noted that Nexi had failed to flag the one-off contributions that benefited the Merchant division, leading investors to expect an even sharper acceleration in revenue this year.

“We (and investors we spoke to) had not expected this headwind in the merchant business”, Barclays said.

($1 = 0.9614 euros)

(Reporting by Agnieszka Flak and Francesco Zecchini, editing by Valentina Za and David Evans)