Join our community of smart investors

Heading for a profitable exit

Shareholders in a financial services group could be heading for a bumper payday early next year.
November 10, 2021
  • Square’s takeover of Afterpay to complete on 18 January 2022
  • Afterpay can exercise its call option early to buy out ThinkSmart’s 10 per cent holding in Clearpay
  • ThinkSmart to return A$5.6m to shareholders in December

The key take for me from Aim-traded finance company ThinkSmart’s (TSL: 105p) annual meeting today is chairman’s Ned Montarello’s commentary on the takeover of Australian Stock Exchange-listed technology group Afterpay (APT:ASX – A$117) by New York Stock Exchange-listed Square Inc (NYSE:SQ.), a US$106bn fintech group led by Twitter founder Jack Dorsey. At current market prices, the all-share offer values Afterpay at A$34bn (£19bn).

The takeover is expected to conclude on 18 January 2021 at which point Afterpay has the right (on change of control) to exercise its call option early to purchase ThinkSmart’s 10 per stake in Clearpay, a fast-growing UK payment platform that enables consumers to split the cost of retail purchases into interest-free payments. The 10 per cent stake is also subject to a call/put arrangement between the two parties exercisable in 2023-24. The valuation methodology is based on key financial metrics as well as the market capitalisation of Afterpay.

This is subscriber only content
Start your trial to keep reading
PRINT AND DIGITAL trial

Get 12 weeks for £12
  • Essential access to the website and app
  • Magazine delivered every week
  • Investment ideas, tools and analysis
Have an account? Sign in