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Barclays ( JJCTF ) struggling to sell stake in UK payments arm

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Fails to agree on price after private equity talks

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Process complicated by takeover of payments partner

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By Amy-Jo Crowley and Emma-Victoria Farr

LONDON, Sept 13 (Reuters) - Barclays ( JJCTF ) is finding

it difficult to sell a stake in its British merchant payments

business due to diverging views on its valuation, four people

with knowledge of the matter told Reuters, complicating the

bank's plans to revamp the unit.

Brookfield Asset Management ( BAM ), which manages assets

worth more than $825 billion, was one of the private equity

firms that dropped out of bidding in recent months mainly over

the price being sought by Barclays ( JJCTF ), two of the people said.

Talks have been complicated by the takeover of Takepayments,

which is one of Barclays' ( JJCTF ) partners in payments, one of the two

people and a fourth said, adding this could reduce revenues.

Brookfield declined to comment.

Britain's third-biggest bank said it did not comment on

speculation and would provide updates "in due course".

Some offers also fell short of Barclays' ( JJCTF ) hopes in part

because of the declining market share of the business and the

investment needed to bring it back to growth, they said.

Barclays ( JJCTF ) remains open to selling a stake in the business,

said one of the people, who were all speaking on condition of

anonymity because the talks are private.

The difficulties come after a sell-off in the European

payments sector over the last three years, triggered by concerns

over revenue outlooks at Worldline, Nexi and

Adyen.

The sale process is complex because of the technology and

the financial arrangements involved, Barclays ( JJCTF ) Chief Executive

C.S. Venkatakrishnan said in June when asked about progress.

"We are exploring a number of options for investment in our

market-leading merchant acquiring business, including strategic

partnerships," a spokesperson said this week.

In December it said it was exploring options for the

payments business and had written down its value by 300 million

pounds ($392 million).

The sale was part of the broader review of Barclays' ( JJCTF ) global

payment activities spanning merchant acquiring and credit card

services. It sold its German consumer finance business to

Austrian bank BAWAG in July.

That sale was expected to release about 4 billion euros

($4.32 billion) of risk-weighted assets and raise Barclays' ( JJCTF ) CET1

ratio - a capital strength measure - by about 10 basis points.

It has been targeting private equity to buy a majority stake

in the UK business after initial approaches to competitors

yielded muted interest, Reuters reported in February.

Barclays ( JJCTF ) initially hoped to value the business at more than

2 billion pounds ($2.5 billion), Reuters previously reported.

But by the time sale documents were distributed to potential

bidders, that valuation had slipped to above 1 billion pounds

($1.3 billion), two of the four people said.

($1 = 0.7644 pounds)