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Worldline turmoil hands Swiss bourse a $300 mn blow on strategic stake
The 2.75 billion Swiss franc ($3.5 billion) deal gave SIX a 27 per cent stake in Worldline and would provide SIX with an 'extreme' amount of firepower to participate in Europe's consolidating market infrastructure sector, Lacher, then chairman of SIX, said at the time. He later held the same position at Swiss wealth manager Julius Baer Group Ltd., before exiting earlier this year.
Worldline has denied the allegations and its chief executive officer has decried the media reports, calling them outdated and part of an orchestrated media campaign against the firm.
The bourse's current stake of roughly 10 per cent in Worldline was valued in its accounts at just under €400 million ($467 million) at the end of 2024. That was already at a premium to its €250 million market value, which has fallen further this year to around €110 million.
SIX is now reviewing potential actions for the shareholding, according to people familiar with the matter, including carrying out a test to determine if further impairment is required. The wait-and-see approach is not an option anymore, said one of the people, who all asked not to be identified discussing private information.
SIX already booked an impairment on its Worldline stake of around 860 million Swiss francs for the fourth quarter of 2023 linked to a cut to the company's outlook and the scrapping of its revenue target. The exchange also adjusted its 2024 net profit to account for another 168 million Swiss francs impairment on the stake.
SIX's largest shareholder is UBS Group AG, with a roughly 35 per cent stake. Representatives for UBS, Worldline and SIX declined to comment. Lacher didn't respond to a request for comment.
'Strategic' holding
Daniel Schmucki, SIX's chief financial officer and a former aviation industry executive, has sat on Worldline's board for the past five years, a period in which the exchange has repeatedly described its holding in Worldline as 'strategic.'
Worldline shares dropped 38 per cent on June 25 after media outlets published reports that the firm had ignored warnings from regulators and continued doing business with risky clients with high fraud rates, including pornographers and dating websites.
The repeated impairments put the bourse at a disadvantage to peers in an industry that has been using major acquisitions to grow and consolidate and is searching for new revenue streams coming from data and private markets.
It's a far cry from 2020, when SIX sold a chunk of its original 27 per cent stake in Worldline to finance the acquisition of the operator of Spain's stock exchange. But since then, SIX has turned down opportunities to reduce its remaining Worldline stake, the people said.
Worldline has hired an external firm to go through its portfolio of risky clients as the payments firm seeks to restore trust, Chairman Wilfried Verstraete told the newspaper Les Echos.
SIX is set to publish second-quarter earnings at the end of July.
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