PARIS (Reuters) - French bank Credit Agricole (EPA:CAGR) said on Monday it had bought 7% of Worldline, in a bid to bolster the payments group after a slump in its share price last year.
Worldline's shares jumped more than 5% after the announcement, which follows reports in December that Credit Agricole was exploring building a stake in the company.
The Paris-based payments firm has lined up bankers to advise on a defence strategy to reassure shareholders and avoid a hostile takeover, Reuters reported last week.
The advisers were sounding out potential investors such as French financial institutions about taking a minority stake in the group, sources said.
The value of Worldline's shares more than halved in October when it cut its financial targets amid scrutiny by German regulators over money-laundering controls.
Worldline said its business had been hit by an economic slowdown in Europe.
Credit Agricole said in a statement on Monday that its purchase of 7% of Worldline was to strengthen a partnership that the two firms agreed last year, showing its "intention to support Worldline’s development and implementation of its strategy as a key European payment services provider".
The pair had agreed a joint venture to tap the 700 billion euros ($767.6 billion) of merchant sales in France as customers increasingly move from cash to card payments. Credit Agricole on Monday said operations would start this year.
Worldline said in a separate statement that it welcomed the investment, which it called 'a testament to the strategic evolution of the European payment market'.