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Exclusive-Fiserv, Amadeus vie to acquire Shift4 Payments, sources say

FILE PHOTO: The logo of Amadeus IT Group tops the company's offices in Madrid

By Anirban Sen and David French

NEW YORK (Reuters) -Fiserv and Amadeus IT Group are competing to acquire Shift4 Payments, a payments processor that has a market value of nearly $7 billion, according to people familiar with the matter.

Fiserv and Amadeus are the two main contenders in a sale process that Shift4 has been running, and are preparing to submit final offers in the coming weeks, the sources said, cautioning a deal is not certain.

The sources declined to discuss the terms of the offers and requested anonymity because the matter is confidential. Shift4 and Fiserv did not immediately respond to requests for comment. Amadeus declined comment.

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Shares of Shift4, which are up about 8% this year, jumped as much as 13% on the news.

Shift4 collects fees from clients, ranging from restaurants, casinos and hotels, to sports teams like the San Francisco 49ers, to facilitate their payments. It processes more than $200 billion worth of annual transactions for over 200,000 customers, according to its website.

Payments processors like Shift4 thrived during the COVID-19 pandemic as customers turned to digital payment methods, but some have since struggled to maintain growth amid increased competition and high inflation.

Earlier this week, Shift4 reported its fourth-quarter earnings and projected a strong outlook for 2024, with its profit and revenue forecasts coming in ahead of market expectations.

Shift4 CEO Jared Isaacman said in a letter to shareholders in November the company was exploring "strategic opportunities and alternatives." In media interviews since then, Isaacman has said the Center Valley, Pennsylvania-based company has fielded acquisition interest from several parties, without naming them.

If completed successfully, the acquisition of Shift4 would be the latest in a string of dealmaking in the financial services sector. Recent transactions include Capital One's $35 billion agreement to acquire Discover Financial, Nasdaq's $10.5 billion purchase of Adenza, and GTCR's acquisition of a majority stake in Worldpay that was valued at $18.5 billion.

Fiserv, which acquired First Data for $22 billion in 2019 and has a market capitalization of about $89 billion, provides technology services to banks, merchants, and other companies to help them process transactions.

Madrid, Spain-headquartered Amadeus, which has a market value of about 27 billion euros ($29.2 billion), is a technology provider focused on travel software systems and counts airlines, railways, business travel agencies and tour operators among its customers. A deal for Shift4 would complement the company's travel booking tools.

Amadeus' fortunes have rebounded after travel bookings slumped during the pandemic. Earlier on Wednesday, Amadeus said it expects revenue to grow between 11% and 14.5% this year.

($1 = 0.9234 euros)

(Reporting by Anirban Sen and David French in New York; Additional reporting by Milana Vinn in New York, Andres Gonzalez and Amy-Jo Crowley in LondonEditing by Nick Zieminski)