Barclays (BCS) has announced a strategic alliance with Brookfield Asset Management (BAM, Financial) to enhance its payment acceptance segment, historically known as its merchant acquiring business. This long-term partnership aims to establish a standalone firm, leveraging Barclays’ vast experience in the UK payments space along with Brookfield's global expertise in private equity, payments technology, and operational transformation.
The collaboration is set to drive innovation and growth, widening the spectrum of services offered while refining client experiences. The business currently plays a vital role in the UK economy, annually processing billions in transactions for small businesses and corporate clients both domestically and globally.
Barclays plans to inject approximately GBP 400 million into the entity over the initial three years. Meanwhile, Brookfield will lend its expertise to facilitate the transformation, securing a financial incentive linked to the business's performance as an alignment of interests.
Moreover, from the third to the seventh year of the partnership, Brookfield has the option to acquire about 70 percent ownership based on market valuation, conditional upon Barclays recovering its investment. If a sale occurs, Brookfield's initial incentive will convert into an extra ten percent stake, culminating in an estimated 80 percent ownership. Barclays intends to retain roughly 20 percent ownership post-sale.
The business will continue to operate under the "Barclaycard Payments" brand and retain its role as the exclusive payment acceptance services provider for Barclays' clientele for at least a decade, signaling Barclays’ confidence in the venture's future potential.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Brookfield Asset Management Ltd (BAM, Financial) is $54.97 with a high estimate of $70.00 and a low estimate of $32.00. The average target implies an upside of 14.54% from the current price of $47.99. More detailed estimate data can be found on the Brookfield Asset Management Ltd (BAM) Forecast page.
Based on the consensus recommendation from 17 brokerage firms, Brookfield Asset Management Ltd's (BAM, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
