- Humm Group (HUM) has entered a non-binding-heads of agreement with Latitude (LFS) for the sale of Humm Consumer Finance for $335 million
- The transaction would include Humm’s Buy-Now-Pay-Later (BNPL), instalment and credit card operations
- LFS has proposed 150 million Latitude shares worth $300 at the valuation of $2 each, equating to a $0.68 value per HUM share, where HUM closed yesterday at $0.90 apiece
- The proposal includes $35 million in cash and an invitation for two HUM independent directors to join the LFS board
- HUM closed yesterday at 90 cents apiece and LFS ended trading at $1.96 a share
HUMM Group (HUM) has entered a non-binding-heads of agreement with Latitude (LFS) for the sale of its Humm Consumer Finance division for $335 million.
The Consumer Finance transaction would include its Buy-Now-Pay-Later (BNPL), instalment and credit card operations.
As part of the non-binding agreement, LFS has proposed 150 million Latitude shares worth $300 at a valuation of $2 each, equating to a $0.68 value per HUM share, where HUM closed yesterday at $0.90 apiece.
Latitude’s proposal includes $35 million in cash, the addition of HUM CEO Rebecca James to lead the merged BNPL business and an invitation for two HUM independent directors to join the LFS board.
According to LFS’s adjacent announcement, the company has predicted the approved transaction will exceed $100 million in cash and combined synergies, before tax in the full year of 2023.
It is also expected to be double digit earnings per share (EPS) accretive.
Exclusivity of the agreement has been agreed until the end of January, giving LFS and HUM time to perform due diligence and negotiate the final agreement.
Any transaction will require approval from the HUM board, the ATO and HUM shareholders.
According to HUM’s announcement, there is no guarantee of any transaction as it remains conditional on the parties mentioned above.
“HUM’s Board and Management are committed to maximising shareholder value. In this context, we believe that the Latitude proposal is potentially attractive to HUM shareholders and warrants due diligence and detailed negotiation,” HUM Chairman Christine Christian said.
HUM closed yesterday at 90 cents apiece and LFS ended trading at $1.96 a share.