Bid Now, Squabble Later for Afterpay

Afterpay shares fell again yesterday after the company revealed it would push ahead with a shareholder meeting to approve the takeover by Block (nee Square) without approval from the central Bank of Spain.

At the same time Afterpay’s board attempted to downplay the importance of that approval by revealing it would ask the nSW Supreme court to change a key condition of the takeover deal with Block to make the approval of the Spanish central bank a ‘condition subsequent’ (ie – after the events) rather than what it is currently, a condition precedent (before the takeover happens).

That way the takeover happens and if there is no approval from the Spanish central bank, the newly merged company – run by Block management can sort that out without delay to the bid’s completion.

Afterpay had been due to hold a meeting yesterday to allow a vote on the all-share takeover offer but last Thursday it said it would postpone the vote until later in December or early 2022 because of the delay by the Spanish central bank, which was not thought to have been a big deal.

On Monday, Afterpay chair Elana Rubin said it now planned to hold the meeting next Tuesday, December 14.

The merger, which is expected to receive shareholder support, has already been endorsed by Block’s shareholders, but the companies are waiting on regulatory approval from the Bank of Spain, regarding Afterpay’s European licence.

The two companies have said they are confident the Bank of Spain will grant the approval, and Afterpay directors re-iterated on Monday that they supported the takeover.

“The Afterpay Directors continue to unanimously recommend that Afterpay shareholders vote in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Afterpay shareholders,” Afterpay said.

Afterpay shares dropped more than 4.3% on Monday to $94 and have fallen more than 22% in the past month.

For some reason the big money has become increasingly nervous. Nearly all that loss – over 16% has come in the past five or six trading sessions.


About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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