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Shares of U.K.-listed payments firm ThinkSmart dropped as much as 20% on Tuesday on worries over Square’s planned acquisition of Afterpay.
ThinkSmart
TSL,
has a 10% stake in the U.K. arm of buy now, pay later company Clearpay, which is mostly owned by Afterpay
APT,
which is in the process of being purchased by Square
SQ,
ThinkSmart says the Square deal will accelerate Clearpay’s growth. Afterpay has an option to buy out ThinkSmart’s Clearpay stake, which can be triggered after the Square deal completes, and if the option isn’t triggered, ThinkSmart can force a sale in 2024.
ThinkSmart put out a statement on Tuesday saying it didn’t understand the reason for the stock-price move. It said it was “positive” that the Bank of Spain will have to approve the Square buyout of Afterpay. “The acceptance by the Supreme Court of New South Wales of the Bank of Spain approval becoming a condition subsequent is seen as a positive step,” the company said.
After the statement, ThinkSmart losses were cut to just 0.5% on the day.
In its own statement on Tuesday, Afterpay said it expects the buyout to be completed in the first quarter of 2022 and said it still recommends Square’s all-stock offer.
The broader U.K. stock market enjoyed a second day of gains, with the FTSE 100
UKX,
rising 1.2% to 7,316.89, buoyed by favorable sentiment toward the omicron variant. Conference organizer Informa
INF,
shot up 6%, and metals producers including Anglo American
AAL,
rallied.
GlaxoSmithKline
GSK,
shares edged higher as the drugmaker said its antiviral worked, in a lab setting, against the omicron variant, as it separately said a plant-based vaccine it’s making with a Canadian developer was effective.
Ferguson
FERG,
FERG,
shares climbed 4% as the plumbing and heating products distributor lifted its full-year outlook, after sales jumped 27% in its U.S. operation in the fiscal first quarter.
