ASX 200 rises, Afterpay soars, Zip jumps

The Afterpay share price soared today after getting a takeover offer from Square.

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The S&P/ASX 200 Index (ASX: XJO) went up by 1.3% today to 7,491 points today.

Here are some of the highlights from the ASX:

Afterpay Ltd (ASX: APT)

It was announced today that Square wants to buy Afterpay. It’s valuing Afterpay at $39 billion.

Square expects to pay Afterpay shareholders in new Square stock. Under the terms of the deal, Afterpay shareholders will receive a fixed exchange ratio of 0.375 Square shares for each Afterpay share they own.

Based on Square’s last closing price of US$247.26 on 30 July 2021, this represents an implied transaction price of $126.21 per Afterpay share, being a premium of 30.6% to the last Afterpay share price.

The ASX 200 buy now, pay later business also released a trading update for FY21.

Total underlying sales increased 90% to $21.1 billion. Looking at the individual regional breakdown, there were $9.8 billion of North American underlying sales (up 148%), $9.4 billion of ANZ underlying sales (up 44%) and $1.8 billion of Clearpay (UK and EU) underlying sales (up 227%).

Afterpay’s overall revenue increased 78% to $925 million and merchant revenue went up 90% to $822 million. It also revealed that gross profit went up 75% to $675 million.

Active merchants rose 77% to 98,200. Total active customers increased by 63% to 16.2 million, but whilst North American active customers rose 88% to 10.5 million. The ANZ active customers only increased by 8% to 3.6 million.

The Zip Co Ltd (ASX: Z1P) share price also rose by around 9% today. It was the second highest rise in the ASX 200.

Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH)

The share prices of Santos and Oil Search went up 0.6% and 4.7% respectively.

These two large businesses have reached an agreement on the merger ratio under the proposed deal.

Under the revised deal, Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share they own.

After the merger, Oil Search shareholders will own approximately 38.5% of the combined entity and Santos will own the other 61.5%.

This revised proposal implies a transaction price of $4.29 for each Oil Search share, based on the closing prices on 19 July 2021. This represents a 16.8% premium to the Oil Search closing price on 19 July.

The two ASX 200 oil shares are expecting compelling value benefits to both sets of shareholders.

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share went up around 2.5% today after providing a trading update.

It said that in the fourth quarter of FY21, its revenue increased 8% quarter on quarter. Revenue for the quarter to 30 June 2021 was $100.1 million.

FY21 earnings before interest, tax, depreciation and amortisation (EBITDA) excluding IPO costs is expected to be at the upper end of guidance (which is between $17 million to $20 million).

Fourth quarter overall broadband connections increased 7.4% and business broadband connections increased 12% on the previous quarter.

It also said that fourth quarter mobile services increased by 20% from the previous quarter, up from 18,684 to 22,454 connections.

Aussie Broadband also said it has signed its first white label customer.

The company said that it launched services on the new Optus mobile virtual network operator (MVNO) agreement.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited and AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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