Latitude Group rescinds buyout offer for Humm’s BNPL business
Australian digital payment and lending firm Latitude Group on Friday terminated its $335 million offer to buy Humm Group’s consumer unit that includes its buy now, pay later (BNPL) business.
Shares of Humm Group fell as much as 11.3 per cent to $0.510, hitting their lowest since March 2020 and extending losses to a fifth session, after the news came in.
Humm Group cited current disruptions in financial markets for the termination of the offer, in a statement to the bourse.
BNPL firms have seen their market value shrink rapidly as interest rate hikes to tame rising inflation fuelled concerns about a slowdown in consumer finance.
Shares of Block Inc, previously known as Square, have lost over half of their value after the company closed the acquisition of Afterpay for $29 billion earlier this year.
Humm Group said on Thursday its consumer unit, Humm Consumer Finance, saw a 61 per cent on-year plunge in year-to-date cash net profit after tax at the end of May due to intense competition, rising interest rates, and weakening consumer sentiment.
The fintech firm also said it intended to review the strategic direction of its consumer unit to focus on its core products and markets as it seeks to restore profitability.
Latitude Group said in a separate statement that its BNPL business represented less than 1 per cent of its revenue and receivables and that it was profitable and well capitalised to execute future opportunities.
- Reporting by Tejaswi Marthi in Bengaluru; Editing by Vinay Dwivedi and Subhranshu Sahu, of Reuters.