Investment volatility strikes as CAB Payments shares plunge.
- StoneX’s withdrawal follows two takeovers bids within a few months.
- The London Stock Exchange sees CAB Payments’ stock price drop by nearly 40%.
- StoneX aims to restrain acquisition interests for six months post-withdrawal.
- Leadership changes precede the financial turbulence for CAB Payments.
Shares of CAB Payments experienced a significant decline, dropping around 20% as trading commenced. This downturn occurred in the wake of StoneX, a US-based payments company, retracting its interest in acquiring the group. StoneX, valued at approximately $2.7 billion, had previously made multiple non-binding offers to acquire CAB.
In July, StoneX initiated its interest by proposing to buy CAB Payments at £1.15 per share. This initial offer was declined, leading StoneX to return in October with a revised offer of £1.45 per share, which valued CAB Payments at £368.5 million. However, by early November, StoneX announced it would not proceed with a formal offer.
According to regulatory parameters, StoneX is now barred from making further acquisition proposals for CAB Payments for six months, unless there is mutual agreement from CAB’s board or if a third-party makes a formal offer. Meanwhile, CAB Payments, founded in 2015 and listed on the London Stock Exchange in 2023, continues to navigate these corporate challenges.
The debut of CAB Payments on the exchange was marked by a share price of 310p, which has significantly decreased to 89.17p, almost 40% lower than StoneX’s valuation offer. Despite the financial upheaval, the company’s recent accounts for the year ending December 2023 reported a pre-tax profit of £37.6 million.
Leadership shifts have accompanied CAB Payments’ market journey. Bhairav Trivedi, the previous CEO, resigned in February, months post-IPO. The company expanded into the EU with a new license in April, and Neeraj Kapur was appointed CEO in June, bringing new management amid ongoing financial developments.
StoneX, initially established as INTL FCStone in 1924, has grown to be a leading player in the American financial services sector. It rebranded as StoneX Group in 2020 and ranked 59th in the 2023 Fortune 500 list.
The market volatility surrounding CAB Payments and StoneX’s decision reflects broader uncertainties in the fintech sector.
