StoneX Group has decided not to proceed with an offer for CAB Payments Holdings, after failing to secure the backing of the company’s largest shareholder, the Helios consortium. The US-based financial services firm had previously raised its possible bid to 110 pence per share, up from an earlier 95 pence approach, in an effort to win board and shareholder support.
CAB Payments’ board had indicated it would be “minded to recommend” the higher 110 pence proposal from StoneX. However, the Helios consortium, which holds about 45% of CAB Payments, declined to support the offer. StoneX stated it was “disappointed” that Helios would neither provide an irrevocable undertaking nor otherwise agree to back or accept the proposed terms.
Without support from Helios, StoneX elected to step away from a potential transaction. The lack of endorsement from the largest shareholder effectively blocked the higher-priced route that CAB Payments’ board had been prepared to consider. Following the announcement of StoneX’s withdrawal, CAB Payments’ shares closed at 83.70 pence in London on Tuesday, down 0.4% on the day.
Helios offer and bid dynamics
Helios had previously tabled a firm offer of USD1.15 per share for CAB Payments. The consortium described its proposal as the only “firm and deliverable” bid for the company. By refusing to endorse StoneX’s increased, but still indicative, offer, Helios maintained its position in favour of its own terms, despite the higher headline price put forward by StoneX.
The divergence between Helios and StoneX over CAB Payments’ future has placed the spotlight on shareholder alignment in contested situations. While CAB Payments’ board signalled a willingness to recommend StoneX’s improved proposal, the absence of a commitment from a shareholder with roughly 45% of the equity left limited scope for the US group to progress.
Context for CAB Payments and StoneX
CAB Payments listed in London in 2023, focusing on cross-border payments to emerging and frontier markets. Since listing, the stock has struggled amid concerns over revenue volatility and regulatory risks in some of its key corridors, factors that have framed the backdrop to takeover interest in the company.
StoneX has been active in deal-making as it expands its trading, payments and markets infrastructure. It has agreed to acquire US broker-dealer The Benchmark Company to strengthen its equity and debt capital markets, research and investment banking capabilities. StoneX has also targeted increased futures and clearing scale, including a deal to acquire long-established futures broker R.J. O'Brien.
The latest decision not to move forward with an offer for CAB Payments underscores the importance of cornerstone shareholder support in executing transactions, particularly when competing bids and differing valuations are in play.
