StoneX withdraws interest in acquiring CAB Payments, leading to a sharp decline in share prices.
- After initial proposals, StoneX decided not to proceed with its acquisition plans.
- CAB Payments experienced a significant share price drop of about 20% following the announcement.
- Financial market reactions reflect the uncertainty surrounding CAB Payments’ future without StoneX’s acquisition.
- The decision leaves CAB Payments to reconsider its strategic options moving forward.
On Thursday, CAB Payments experienced a significant drop in its share prices, falling around 20% at the opening of trading. This occurred after StoneX, a US-based payments firm, announced its decision to withdraw interest in acquiring the London-listed group. The impact on the stock reflects investor concerns about the company’s future prospects in the absence of a takeover by StoneX.
StoneX, with a market valuation of approximately $2.7 billion, had previously made multiple non-binding proposals to acquire CAB Payments. The initial offer in July 2024 was priced at £1.15 per share, which CAB Payments rejected. This was followed by a revised offer of £1.45 per share in October 2024, valuing CAB Payments at £368.5 million. Despite these efforts, StoneX has opted not to finalise the acquisition.
According to regulatory requirements, StoneX was bound by a deadline of 7 November 2024 to either make a firm offer or officially announce its decision not to proceed. With the announcement, StoneX is now restricted from making any new acquisition proposals for CAB Payments over the next six months, barring certain exceptions such as consent from CAB or an offer from a third party.
CAB Payments, founded in 2015, provides infrastructure for business-to-business payments and went public on the London Stock Exchange in July 2023 with a debut share price of 310p. However, this has since decreased significantly, sitting at 89.17p as of the latest trading day—almost 40% lower than the valuation offered by StoneX.
In the financial records ending 31 December 2023, CAB Payments reported a pre-tax profit of £37.6 million. The company underwent a leadership change in 2024, appointing Neeraj Kapur as chief executive in June, following the departure of former CEO Bhairav Trivedi in February. Additionally, the company extended its operations into the European Union by securing a Dutch financial licence in April.
The withdrawal of StoneX leaves CAB Payments facing strategic decisions as it navigates its market position without a potential acquisition.
