After a period of negotiations, StoneX has decided against acquiring CAB Payments, leading to a notable impact on the latter’s stock.
- Shares in CAB Payments fell by 20% after StoneX pulled out of takeover talks, reflecting market uncertainty.
- StoneX had initially presented multiple non-binding offers, with its highest being £1.45 per share.
- Regulatory conditions required a decision by 7th November, with StoneX choosing not to proceed with a formal offer.
- CAB Payments’ stock was already experiencing a downturn, debuting at 310p and dropping to 89.17p before StoneX’s announcement.
Following extensive negotiations this year, StoneX has retracted its interest in acquiring CAB Payments. This has resulted in a substantial 20% decrease in CAB Payments’ stock value during early trading. The market reacted swiftly to the news, suggesting a lack of investor confidence in the company’s standalone prospects.
StoneX, valuated at $2.7 billion, had extended several non-binding proposals to take over CAB Payments. The initial overture, tabled in July, was priced at £1.15 per share. Although CAB Payments declined this proposal, StoneX returned with an improved offer in October, proposing a price of £1.45 per share. This valued the company at £368.5 million, a substantial increase from the initial bid.
Despite the better proposal, CAB Payments indicated intent to consider what would most benefit the firm going forward. Regulatory timelines mandated StoneX to declare its decision by 7th November, leading to their eventual withdrawal from the acquisition pursuit.
A significant implication of StoneX’s withdrawal is that the firm is restricted from making another offer to acquire CAB Payments for the next six months. Exceptions to this constraint would hinge on either approval from CAB’s board or a new third-party offer surfacing.
The company has faced challenges since its public listing on the London Stock Exchange in July 2023, debuting with shares priced at 310p. However, the price has drastically declined to 89.17p, underlining the firm’s struggle to sustain investor interest and market confidence. This drop is highlighted by CAB Payments’ most recent financial performance, reporting a pre-tax profit of £37.6 million for the year ending December 2023.
The withdrawal of StoneX is a pivotal moment for CAB Payments, indicating the need for strategic refocus to regain market confidence.
