One of the US’s quieter billionaires has just placed a bid to acquire Afterpay Ltd (ASX: APT). But who is Jack Dorsey and what might he want with the ASX’s buy now, pay later (BNPL) gem?
Today, Square’s $39 billion takeover bid was approved by Afterpay’s board. The US-based fintech plans to provide Afterpay shareholders with 0.375 shares of Square Class A common stock for every Afterpay security they hold.
The offer implies a $126.21 valuation on Afterpay’s shares – a 30.6% premium on Afterpay’s share price as of Friday’s close.
Who is Jack Dorsey?
Jack Dorsey is a Californian tech entrepreneur with a net worth of US$13.9 billion (around $18.9 billion), according to Forbes.
As well as holding the CEO role at both Twitter and Square, Dorsey co-founded the tech monoliths.
After establishing Twitter in 2006, he was the first person to ever tweet. Dorsey then founded Square in 2009, donated $1 billion (around 28% of his net worth) to COVID-19 relief funds in April, and now, he’s likely to be the future owner of Afterpay.
He is also a major Bitcoin enthusiast.
What does Dorsey want with Afterpay?
Square offers a point-of-sales (POS) system and Cash App. Dorsey says both will be strengthened by Afterpay’s acquisition.
According to Square, purchasing Afterpay will let “even the smallest of merchants” offer their customers a BNPL service.
It believes Afterpay will see more sellers using Square, aid its expansion into new locations, and improve its income’s growth rate.
Dorsey commented on the takeover:
Square and Afterpay have a shared purpose… Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.
The leader of Square’s Cash App business Brian Grassadonia also commented on the benefits Afterpay could bring Square:
The addition of Afterpay to Cash App will strengthen our growing networks of consumers around the world, while supporting consumers with flexible, responsible payment options.
Finally, Afterpay consumers are set to benefit by getting access to Cash App’s offerings. The app offers money transfers, stock investing, and Bitcoin purchases. Additionally, Afterpay’s cofounders and co-CEOs Anthony Eisen and Nick Molnar said the takeover will benefit the BNPL company. They said:
By combining with Square, we will further accelerate our growth in the US and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers… It also provides our shareholders with the opportunity to be a part of future growth of an innovative company aligned with our vision.