Credit Corp lobs $385m takeover offer for hummgroup

Just one day after the abrupt departure of its chief financial officer, hybrid lender hummgroup (ASX: HUM) has revealed the receipt of a $385 million indicative proposal from Credit Corp Group (ASX: CCP) as well as a shareholder notice aiming to oust three directors including founder Andrew Abercrombie.

Credit Corp's non-binding offer at $0.77 per share represents a 16.66 per cent premium to yesterday's closing price, and is 32 per cent higher than an offer from Abercrombie himself that was in swing for five months until discusions concluded due to insufficient interest from key shareholders.

Abercrombie is by far the largest shareholder in hummgroup, a former buy now, pay later (BNPL) company that is transitioning out of that model towards being a hybrid loan product provider with limits of up to $50,000. His affiliate, The Abercrombie Group (TAG), owns more than a quarter of shares on issue.

But early last week a minority investor faction of Jeremy Raper and Collins Street Value Fund acquired more shares in hummgroup, taking their holdings to 8.36 per cent and setting the scene for an attempted board shake-up.

Hummgroup has revealed today that yesterday it received a notice from Raper and Collins Street under 203D of the Corporations Act stating their intention to move resolutions at a general meeting to remove Andrew Abercrombie, Robert Hines and Andrew Darbyshire as directors.

These three directors represent 75 per cent of the board, with Dublin-based independent non-executive director Teresa 'Terry' Fleming the only director not named in the resolution.

The notice also contemplates removing any other directors appointed after 15 December.

Soon after the immediate resignation of CFO Adrian Fisk, who had held the role since 2021, hummgroup also reported today that on 19 November it received a confidential, conditional, non-binding indicative proposal from Credit Corp to acquire 100 per cent of shares in the company.

The two companies have been in discussions since then, with the proposal comprising two options - a $0.77 per share scheme of arrangement in cash, or an off-market $0.72 per share cash deal if the scheme of arrangement i unsuccessful, minus any dividends or distributions declared after 19 November and conditional on the suitor achieving acceptances for 50.1 per cent of hummgroup shares.

The board has informed Credit Corp that it is willing to engage on the proposal and has offered to provide due diligence, subject to settling a market standard non-disclosure agreement.

Hummgroup - which describes itself as 'Australiasia's original fintech' - notes its board is prepared to work constructively with Credit Corp to see if a proposal can be developed that it is prepared to recommend.

"The proposal is subject to numerous conditions, including satisfactory completion of due diligence, final Credit Corp board approval, negotiation of binding transaction documents, unanimous recommendation by hummgroup's independent board committee, regulatory approvals and finalisation of Credit Corp's financing arrangements," the group notes.

"No binding agreement exists between hummgroup and Credit Corp, and there is no certainty that any transaction will proceed."

HUM shares are up 9.85 per cent in morning trading at $0.725, while CCP shares are down 1 per cent at $13.80.