Bank of Queensland (ASX:BOQ) hoses down Humm (ASX:HUM) takeover rumours

The bank was having none of it after takeover talks surfaced today.

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an attractive woman gives a time out signal with her hands, holding them in a T shape, indicating a trading halt.

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The Bank of Queensland Limited (ASX: BOQ) share price recovered slightly in afternoon trade after falling overall today. The lift came after the major bank hosed down speculation on a potential takeover of buy now, pay later (BNPL) player, Humm Group Ltd (ASX: HUM).

Bank of Queensland shares closed at $8.20 today, down 0.37%. Meanwhile, the Humm share price went gangbusters and was up 5%, trading at 93.5 cents at the market close.

Let’s take a look at what may have weighed into investor sentiment on the companies today.

Takeover speculation

Bank of Queensland released a short statement in response to an article in News Corp titles today suggesting the bank had engaged Goldman Sachs to assist with “early discussions” to take over the BNPL company.

Earlier this month, Humm advised it has received “third party interest” to acquire all or part of the company. However, no details on these potential companies have been released. Humm advised at the time it would engage on these proposals to find out if they were in the best interests of the company and its shareholders.

In a statement to the market on Thursday afternoon, the Bank of Queensland shut down talk it was involved in the proposal, saying:

Bank of Queensland Limited notes the media speculation overnight regarding a possible transaction between BOQ and Humm. BOQ is not pursuing the transaction as speculated in the media article.

Investors appeared to react positively to this news, with the share price jumping from $8.13 to $8.20 following the announcement, nearly a 1% gain. Meanwhile, Humm’s share price dropped from 98 cents to 93.5 cents following the update, a 4.6% drop.

As my Foolish colleague James has noted, the Humm board suggested there was no assurance any transaction would occur. Further, the company remained profitable and had no corporate debt. In fact, the board felt that the company’s shares were undervalued.

Share price recap

The Bank of Queensland share price is up 9.11% year to date and rising 7.85% over the past 12 months. In the past month, it has gained 5.67%, while it is up 2.63% in the past week.

Meanwhile, the Humm share price is down almost 17% year to date and more than 18% in the past 12 months. Despite this, it’s gained 22% in the past month and 3.3% in the past week.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has returned more than 12% in the past year.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Humm Group 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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