Private equity firm Clayton Dubilier & Rice (CD&R) is reportedly in early-stage talks to buy Global Payments Inc. (NYSE:GPN), and Michael Burry says the potential deal is a measuring stick for the rest of the legacy payments sector.
- GPN stock is moving Monday. Get all the details here.
Shares of Global Payments climbed more than 11% in Friday’s afternoon trading after Reuters broke the news that CD&R has partnered with private equity firm GTCR, Global Payments’ biggest shareholder, on a joint bid.
Burry notes GTCR holds roughly 15% of the company, a stake it received when it sold Worldpay to Global Payments.
Global Payments Already Priced For A Deal
Burry is not chasing the rally. In a Monday Substack post, he calculated a “control premium” fair value for Global Payments of $45 to $60 per share. That’s roughly half the $96.84 the stock reached after the report.
At current prices, he sees about a 10% implied return for a buyer taking control.
He also questions how a private equity owner would exit. If CD&R views the Worldpay buyout at 9.8x EBITDA or the Issuer sale at 12.3x as realistic comparables, Burry says it would be “a road to disappointment.”
The real signal lies elsewhere. Financial buyers usually pay less than strategic buyers, who factor in synergies and competitive positioning. Burry argues a private equity takeout therefore offers a useful valuation benchmark for minority shareholders in similar companies.
Fiserv Stands Out
Run through that lens, Fiserv Inc. (NASDAQ:FISV) looks cheap. Burry pegs its comparable takeout value at $100 to $120 per share, against a recent price of $50.02. Fiserv remains a full position for him.
“Fiserv is still Castle,” Burry wrote, using his label for top-quality holdings.
His case comes with a caveat. Burry says Fiserv sits roughly at the price offering a 15% annual return to a control buyer. On a minority-shareholder basis, the stock still trades at about 1.6x his intrinsic value estimate. Burry still describes the setup as an opportunity, arguing the buyout activity shortens the timeline for Fiserv’s turnaround story.
Fiserv also carries baggage. Prior management set overly aggressive growth targets and leaned on poorly disclosed benefits from Argentine hyperinflation.
Restoring credibility on Wall Street takes time, but even so, Burry notes insiders have been significant buyers at these levels.
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Fidelity National Lands On The Wrong Side
Fidelity National Information Services Inc. (NYSE:FIS) sits on the other side of the ledger. Burry puts its comparable value at $18 to $26 per share, well below its $38.55 price. He calls the stock roughly 45% to more than 100% overvalued.
He also highlights a large gap: Fidelity National paid about 12.3x EBITDA for Global Payments’ Issuer business in January, while by Burry’s math, CD&R would pay about 7x for all of Global Payments.
PayPal Still a ‘Fat Pitch’
PayPal Holdings Inc. (NASDAQ:PYPL) is a different kind of business and a weaker comparison. Burry still calls it a “Fat Pitch” in the $50s and holds a small to normal-sized position.
Buying the Market’s Rejects
The post’s broader theme extends beyond payments. Burry believes today’s market structure, driven by momentum-chasing pod shops and volatility-targeting funds, punishes underperformers with unusual severity.
“The market is tarring and feathering losers like almost never before,” he wrote.
He has responded by buying them. Burry added to his Sprouts Farmers Market Inc. (NASDAQ:SFM) 2028 LEAP calls and described a basket of beaten-down retailers, including Deckers Outdoor Corp. (NYSE:DECK), Lululemon Athletica Inc. (NASDAQ:LULU), Birkenstock Holding plc (NYSE:BIRK) and Build-A-Bear Workshop Inc. (NYSE:BBW).
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