SNEX
Stonex Group INC
NASDAQ
8-K: StoneX Group Abandons Bid for CAB Payments, Citing No Intention to Make Offer
Sentiment:
Merger Announcement Update
7 November 2024 7:24 PM
StoneX Group Inc. has announced it will not pursue its previously considered acquisition of CAB Payments Holdings plc.
Worse than expected
The abandonment of the acquisition is worse than expected as it indicates a change in strategic direction and potential loss of opportunity for StoneX.
Summary
- StoneX Group Inc. had previously made an unsolicited non-binding proposal to acquire CAB Payments Holdings plc.
- This proposal was made public by CAB Payments on October 10, 2024.
- StoneX has now announced on November 7, 2024, that it will not be making an offer for CAB Payments.
- This decision means StoneX is bound by certain restrictions under Rule 2.8 of the UK City Code on Takeovers and Mergers.
- These restrictions prevent StoneX from making another offer for six months unless specific conditions are met.
Sentiment
Score: 3
Explanation: The sentiment is negative due to the abandonment of the acquisition, which could be seen as a setback for StoneX's growth strategy. The restrictions imposed by the UK takeover code further limit the company's flexibility.
Highlights
- StoneX Group Inc. has decided not to proceed with a potential acquisition of CAB Payments Holdings plc.
- The initial proposal was an unsolicited non-binding offer.
- StoneX is now restricted from making another offer for CAB Payments for six months under UK takeover rules.
- The restrictions can be lifted if CAB Payments agrees, a third party makes an offer, or there is a material change in circumstances.
Negatives
- StoneX has abandoned its pursuit of CAB Payments, which may disappoint investors who saw potential in the acquisition.
- The company is now bound by restrictions that limit its ability to make another offer for six months.
Risks
- The abandoned acquisition could lead to questions about StoneX's strategic direction.
- The restrictions on making another offer for six months could limit StoneX's options for growth.
- There is a risk that a competitor could make an offer for CAB Payments, potentially leaving StoneX at a disadvantage.
Future Outlook
StoneX will be bound by restrictions under Rule 2.8 of the UK City Code on Takeovers and Mergers for six months, unless specific conditions are met.
Management Comments
- StoneX confirms that it does not intend to make an offer for CAB Payments.
Industry Context
This announcement reflects the complexities of cross-border mergers and acquisitions, particularly when dealing with UK takeover regulations. It highlights the strategic decisions companies must make when evaluating potential acquisitions.
Comparison to Industry Standards
- The abandonment of the CAB Payments bid is not uncommon in the financial services industry, where deals can fall apart due to various factors including regulatory hurdles, valuation disagreements, and strategic shifts.
- Other companies such as Virtu Financial and Global Payments have also experienced similar situations where initial acquisition interests did not materialize into a final deal.
- The six-month restriction imposed by the UK City Code is a standard practice to ensure fair market conditions and prevent undue influence on target companies.
Stakeholder Impact
- Shareholders of StoneX may react negatively to the news of the abandoned acquisition.
- CAB Payments shareholders may also experience a change in sentiment due to the withdrawal of the offer.
- Employees of both companies may experience uncertainty due to the change in plans.
Key Dates
- October 10, 2024: CAB Payments announced it had received an unsolicited non-binding proposal from StoneX.
- October 21, 2024: StoneX issued an announcement regarding stockholder disclosure obligations related to the CAB Payments proposal.
- November 7, 2024: StoneX announced it is no longer pursuing the acquisition of CAB Payments.
Keywords
StoneX Group, CAB Payments, Acquisition, Takeover, Merger, Rule 2.8, UK City Code, Offer
SNEX
Stonex Group INC
NASDAQ
Sector: Financial Services
Filings with Classifications
Capital raise
14 April 2025 7:02 AM
Merger Announcement
- StoneX has obtained fully committed bridge financing for the cash portion of the consideration.
- StoneX plans to issue approximately $625 million of long-term debt prior to the closing date.
Better than expected
14 April 2025 7:02 AM
Merger Announcement
- The acquisition is expected to enhance margins, EPS, and return on equity.
- Consolidation of operations is expected to drive more than $50mm in expense synergies and unlock at least $50mm in capital synergies.
Better than expected
5 February 2025 5:22 PM
Quarterly Report
- The company achieved record net operating revenues and net income, indicating better than expected financial performance.
- Operating revenues increased by 20%, demonstrating strong growth compared to the previous year.
- Diluted earnings per share were $2.54, higher than the $2.13 reported in the prior year.
Better than expected
5 February 2025 4:25 PM
Quarterly Report
- The company reported record quarterly net operating revenues, net income, and diluted EPS, indicating better than expected financial performance.
Better than expected
23 January 2025 4:12 PM
Proxy Statement
- The company achieved record operating revenues, net income, and stockholders' equity, indicating better-than-expected financial performance.
Better than expected
29 November 2024 9:20 AM
Annual Results
- The company's operating revenues increased by 18% to $3,436.2 million.
- Net income rose to $260.8 million, a 9% increase compared to the previous year.
- Diluted earnings per share reached $7.96, up from $7.45 in the prior year.
Delay expected
29 November 2024 9:20 AM
Annual Results
- The redemption of the Notes due 2025 did not occur until June 17, 2024, in order to redeem those notes at par.
Better than expected
19 November 2024 4:24 PM
Quarterly Report
- The company's net income and EPS significantly exceeded the prior year's results, indicating better than expected performance.
- The company's revenue growth and increased trading volumes across most segments also point to better than expected results.
Worse than expected
7 November 2024 7:24 PM
Merger Announcement Update
- The abandonment of the acquisition is worse than expected as it indicates a change in strategic direction and potential loss of opportunity for StoneX.
Worse than expected
6 August 2024 5:46 PM
Quarterly Report
- Net income decreased by 11% and diluted earnings per share decreased from $2.17 to $1.88 compared to the same quarter last year.
Worse than expected
6 August 2024 4:20 PM
Quarterly Report
- Although the company achieved record net operating revenues, the net income and diluted EPS were down compared to the prior year, indicating worse than expected profitability.
Better than expected
8 May 2024 6:38 PM
Quarterly Report
- The company's operating revenues and net income increased significantly year-over-year, indicating better than expected performance.
Better than expected
8 May 2024 4:28 PM
Quarterly Report
- The company's operating revenues, net income, and diluted EPS all exceeded the prior year's results, indicating better than expected performance.
Capital raise
16 February 2024 4:18 PM
Debt Offering Announcement
- StoneX Group Inc. is raising $550 million through the issuance of senior secured notes.
- The notes are being offered in a private placement to qualified institutional buyers and certain persons outside the United States.
Capital raise
15 February 2024 9:07 AM
Debt Offering Announcement
- StoneX Group is conducting a private offering of $550 million in senior secured notes due 2031.
- The notes will be offered to qualified institutional buyers and certain persons outside the United States.
- The proceeds will be used to redeem existing debt and repay borrowings under the senior secured revolving credit facility.
Worse than expected
6 February 2024 5:29 PM
Quarterly Report
- Net income decreased due to a non-recurring gain in the prior year and reduced market volatility.
- Diluted earnings per share decreased from $2.41 to $2.13.
Better than expected
6 February 2024 4:40 PM
Quarterly Report
- The company's adjusted net income increased by 27% year-over-year, indicating better than expected underlying performance when excluding the impact of a prior year acquisition gain.
- The company's operating revenues increased by 20% year-over-year, indicating better than expected growth.
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