A dramatic shift may occur at the London Stock Exchange as US-based StoneX proposes to acquire CAB Payments.
- CAB Payments has received a non-binding offer valuing its shares at £1.45, totalling £368.5m.
- Initial takeover attempts by StoneX in July, offering £1.15 per share, were declined by CAB Payments.
- The management at CAB Payments is deliberating the revised proposal, with a decision deadline set for 7 November.
- Despite recent financial setbacks, CAB Payments is evaluating potential delisting from the London exchange.
The fintech landscape at the London Stock Exchange could be altered significantly, following news that StoneX, a US financial services firm, has made a non-binding takeover offer for CAB Payments. This potential acquisition reflects a continued interest from StoneX in acquiring CAB Payments, following previous proposals that have been revised upwards.
In July, StoneX offered £1.15 per share for CAB Payments, which was rejected. The revised proposal now suggests a share price of £1.45, valuing the company at £368.5 million. This reflects a substantial increase in valuation, aimed at addressing the concerns previously raised by CAB Payments’ board.
CAB Payments, which provides the infrastructure essential for business-to-business money transfers, only listed on the London Stock Exchange in 2023 with a high valuation of £851 million. However, the company’s share price has suffered a dramatic decline, more than 70% less than its initial entry valuation, due to lowered revenue guidance impacting investor confidence significantly.
The company’s financial challenges were compounded when its CEO, Bhairav Trivedi, announced his resignation less than a year post-IPO. Following this leadership change, CAB Payments revealed a 14% decline in pre-tax annual profits. However, in an attempt to expand its market presence, the company obtained a payment service provider licence in Europe in April, enhancing its operational capabilities across the European Economic Area.
Despite these efforts, the future of the company appears uncertain, with the board now seriously considering StoneX’s proposal. StoneX has until 7 November to confirm its intentions, thereby leaving open the possibility that CAB Payments might delist from the London Stock Exchange should the acquisition proceed.
The proposed takeover by StoneX could have significant implications for CAB Payments and the London Stock Exchange, pending further decisions.
