US financial services and digital payments company Square is set to acquire Australia’s buy now, pay later star Afterpay in a $39bn deal, in the largest deal in Australian corporate history.
Square and Afterpay on Monday morning announced the all-scrip deal, under which Square will acquire all of the issued shares in Afterpay by way of a recommended scheme of arrangement.
Afterpay shares surged after news of the deal, soaring 27 per cent to $122.99 in early trade, while shares across the buy now, pay later sector also rose strongly.
The $US29bn ($39bn) valuation is based on Square’s market capitalisation on July 30 and Afterpay’s board has recommended the transaction, with co-founders Anthony Eisen and Nick Molnar to join Square when the deal completes.
Mr Molnar’s current stake of 6.87 per cent means the deal is worth $2.68bn for him, while Mr Eisen’s 6.72 per cent stake equates to a $2.62bn windfall.
Afterpay shares last closed at $96.66 apiece, giving it a market value of $27.99bn. The proposed deal values Afterpay at $126.21, a 30 per cent premium at its closing price last week.