CAB Payments engages with US firm on possible takeover offer
Fintech CAB Payments has said it is discussing a possible takeover offer with US payments firm StoneX after its disastrous London float last summer.
CAB Payments said in a trading update that “discussions with StoneX are continuing” and the US firm is undertaking due diligence as it considers making a formal bid.
The London-based firm – which provides infrastructure for business-to-business money transfers – previously said on 10 October that it had received a non-binding proposal from Nasdaq-listed StoneX at a price of 145p per share.
The proposal valued CAB at £368.5m, a far cry from its IPO on the London Stock Exchange last July, which gave it a valuation of £851m.
It was the capital’s largest float of the year and was seen as a much-needed boost for London, which has struggled to attract big-ticket tech listings in recent years.
However, CAB’s shares have since plunged 64 per cent after it was caught up in a major foreign currency policy shift from the Nigerian central bank that weighed heavily on its earnings.
Just seven months after the float, chief executive Bhairav Trivedi announced he would step down from the role. He was replaced by Neeraj Kapur in June.
Under UK takeover rules, StoneX has until 5pm on 7 November to either make a firm offer for CAB or walk away.
CAB’s share price dropped around seven per cent to 112p in early trading on Wednesday.
It has traded below 130p since announcing StoneX’s interest, suggesting CAB’s investors have doubts over the proposal.
The firm said there can be no certainty that an offer will be made or as to the terms StoneX may put forward.
StoneX is headquartered in New York and has a market capitalisation of $2.87bn.
Its 145p proposal came after a series of approaches starting in July, which initially priced CAB’s shares at 115p.
These proposals were rejected by CAB’s board after concluding “they were not in the best interests of the company and its shareholders”.
A potential takeover could become the latest in a string of deals this year, as mostly overseas buyers have pounced on the relatively cheap valuations of London-listed firms compared to overseas counterparts.
CAB said on Wednesday that its revenue performance for July and August was in line with management’s expectations, but marginally below those expectations by the end of September.