It’s now almost exactly four months since the buy now, pay later (BNPL) pioneer Afterpay Ltd (ASX: APT) announced that it is to be acquired by the US payments giant Square Inc (NYSE: SQ). It might seem like old news today. But at the time, one cannot overstate the significance of this development. Not only would an Afterpay acquisition be one of the largest corporate takeovers in Australian history. But it also could result in Square shares joining the ASX boards.
If Square, a US$96.1 billion ($134.4 billion) company, were to join the ASX boards, it would immediately become one of our largest ASX-listed companies. It would exceed the market capitalisation of BHP Group Ltd (ASX: BHP). This is exactly what both companies intend to happen if the merger is successful.
But it’s been four months now. Four months in which the Afterpay share price has drifted almost 16% lower than the price it was asking the day after the acquisition news become public.
So what’s happening with the Afterpay-Square marriage? Is it a done deal? Or could someone still be left at the altar?
When will Afterpay and Square tie the knot?
Well, when Square and Afterpay initially announced the tie-up, they listed a number of hoops both companies would have to jump through before the deal could be finalised. These included regulatory approval and approval from the shareholders of both companies.
Well, Square shareholders have since given the marriage their tick of approval. This happened back on 4 November. Since then, the Supreme Court of New South Wales has given the company a green light to convene an extraordinary general meeting on the proposed merger. This will occur next week on Monday 6 December, when Afterpay shareholders will get their own chance to vote on the acquisition.
If shareholders vote ‘yes’, as Afterpay’s board has recommended they do, then the last major hurdle will be removed from the process.
If all goes well, Afterpay and Square will be on track to become one company. Presumably during “[the] first quarter of calendar year 2022” – the original date that both companies gazetted.
So this Afterpay and Square merger certainly isn’t a done deal yet. But if Afterpay shareholders vote in favour of it next week, it will be a lot closer to being so.