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Afterpay (ASX:APT) - Co CEOs, Anthony Eisen (left) & Nick Molnar (right)
Co CEOs, Anthony Eisen (left) & Nick Molnar (right)
Source: Supplied via The Saturday Paper
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  • Shareholders of Square Inc. vote to proceed with the acquisition of Afterpay (APT), bringing the buy-now pay-later sector’s biggest-ever deal one step closer to completion
  • Australian Afterpay investors will get the choice between US-listed Square shares or accepting ASX-listed Square shares
  • According to Macquarie, the RBA’s rules could reduce APT’s consumer basis by 10 per cent, therefore devaluing its share price in the merger
  • Afterpay’s share price was previously valued at $126.21 per share, or $2.25 more than the current price of $123.96
  • Afterpay was up 1.99 per cent to $123.95 per share at 3:10 pm AEDT

Shareholders of Square Inc. have voted to proceed with the acquisition of Afterpay (APT), bringing the buy-now pay-later sector’s biggest-ever deal one step closer to completion.

The first court hearing took place today, where the NSW court approved Afterpay having a shareholder meeting to authorise APT’s release of the scheme booklet to its investors.

Afterpay shareholders will vote on the acquisition on December 6, where the Foreign Investment Review Board and other bodies will oversee the process.

Australian Afterpay investors will also get the choice between US-listed Square shares or accepting ASX-listed Square shares.

Mark Arnold, Managing Director of Hyperion Asset Management, said the merger offered promising growth for Afterpay within the Square family.

“The combination increases the resilience of both businesses. We believe Afterpay will flourish within the Square ecosystem, as it gets access to its product development and its seller user base,” he said.

Hyperion Asset Management holds stakes in both Afterpay and Square.

Deal maker

Square, the US listed fintech company previously planned to buy the Australian buy-now play-later app for $39 billion, making it the largest corporate deal in Australian history.

The companies previously flagged the merge plans in April year and released the takeover deal in August.

According to Square CEO Jack Dorsey, the merger of the companies is for the sake of the consumer.

He said the aim is “to deliver even more compelling products and services for merchants and consumers, putting the power back into their hands.”

In the deal, Square planned to offer Afterpay shareholders 0.375 Square shares for every APT share.

Afterpay’s share price was previously valued at $126.21 per share, or $2.25 more than the current price of $123.96.

Analysts appraisal

Earlier this month the Reserve Bank of Australia (RBA) said it may add a surcharge on BNPL transactions, which some predicted would cause hesitancy for the Square- Afterpay merger.

According to Macquarie, the RBA’s move would reduce APT’s consumer basis by 10 per cent, therefore devaluing its share price in the merger.

Macquarie also said the new regulations would domino onto other BNPL apps as Australia led regulations in the industry.

“Beyond Australia, where BNPL is most mature, we note other markets may also follow Australia’s lead in enforcing stricter regulation on BNPL,” they said.

Afterpay was up 1.99 per cent to $123.95 per share at 3:10 pm AEDT.

APT by the numbers
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