CAB Payments Holdings PLC (LSE:CABP) shares climbed 5.7% to 76.3p on Monday after the board rejected a proposed offer from a consortium led by its former private equity owner Helios Investment Partners.
Earlier, Helios said it had sweetened its take-private proposal to $1.15 (84p) a share in cash, valuing the cross-border payments group at $292 million. This represented a 21% premium to CAB’s 30-day average share price.
The consortium has also proposed an unlisted share alternative for investors who want to stay involved with the company if it goes private.
The approach comes after CAB rejected a lower offer of $1.05 (77p) per share last week.
The independent board of CAB Payments rejected the increased $1.15 per share approach, calling it “highly opportunistic” and fundamentally undervaluing the business.
It said the proposal fails to reflect recent trading, strategic progress, and geographic expansion, including new offices in New York and Abu Dhabi.
The board pointed to improved income performance and a new global clearing partnership as evidence of longer-term value.
Shareholders were advised to take no action, with full-year results due on 5 March
Helios said it has secured backing – or letters of support – for over 50% of CAB’s outstanding shares. That includes a 45% holding by Helios Fund III and a non-binding letter from Eurocomm Holding covering a further 5%.
Helios argues the company is better off under private ownership following a difficult spell on the public market, which has included a profit warning and a change in leadership.
CAB shares were floated in 2023 at 335p, with Helios selling almost 40% of its shares in the company in the float, which raised £292 million and saw the payments outfit valued at £851 million.
But this was followed by a profit warning later that year saw the shares nosedive to 50p as the company's revenues and profits were hit by volatile conditions in a number of its key African currencies, including the value of the Nigerian naira plunging over 90% (though CAB was a profitable mark for JPMorgan Chase, which was sole sponsor and joint bookrunner on the IPO, while its UK stockbroking subsidiary Cazenove gained further by taking a short position on CAB’s shares).
The shares traded above 100p ($1.35 at current rates) for most of 2024, amid takeover talks with StoneX that eventually went nowhere.
The consortium has until 2 March to make a firm offer.