Delays from the Bank of Spain in approving a multi-billion takeover of Afterpay (ASX: APT) have seen the buy-now pay-later giant postpone the meeting at which shareholders will vote on a takeover proposal from Square (NYSE: SQ), which today changed its name to Block.
In an ASX statement, Afterpay says all regulatory conditions have been satisfied, excluding the Bank of Spain which is yet to give its blessing to the two fintechs.
“Afterpay and Square are confident that the Bank of Spain condition will ultimately be satisfied,” says Afterpay.
“Whilst the statutory deadline for Square’s application for Bank of Spain approval is currently 21 February 2022, at present Square expects that the Bank of Spain condition will be satisfied in mid-January 2022.”
As such, Afterpay has postponed the scheme meeting that was scheduled for 6 December, and is aiming to proceed on a different date before the end of 2021, noting that it is unlikely the Bank of Spain will have agreed to the deal by then.
“If Afterpay and Square determine that this is not possible, it is likely the Scheme Meeting will be delayed until the new year. Implementation of the Scheme is still anticipated to occur in Q1 CY22,” says Afterpay.
“Afterpay will notify shareholders of the details of the adjourned Scheme Meeting, Second Court Date and the revised implementation timetable as soon as they have been confirmed.
“The Afterpay Directors continue to unanimously recommend that Afterpay shareholders vote in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Afterpay shareholders.”
The delay comes on the same day that Square announced a change to the company name.
The Jack Dorsey-founded business is now called Block - an umbrella name tying together its brands which include music streaming service Tidal, payments app CashApp, Bitcoin business TBD and Square.
“We built the Square brand for our Seller business, which is where it belongs,” said Dorsey in a press release.
“Block is a new name, but our purpose of economic empowerment remains the same. No matter how we grow or change, we will continue to build tools to help increase access to the economy.”
Square shareholders have already approved the takeover of Afterpay, which, at the time it was announced in August, was worth $39 billion.
However, as the acquisition will be paid in Square stock, the ultimate value of the deal has dipped following a prolonged dive in SQ shares which has been linked to its close ties to Bitcoin holdings - which have declined in value - and the company authorising payments using the cryptocurrency.
When the deal was announced on 2 August, SQ shares were trading at $272.38 per share, but as of 1 December, one share in the US fintech is worth just $194.50, representing a decline of about 28 per cent.
As such, if the deal were to go through today, the acquisition would be worth around $29 billion.
Shares in Afterpay are down 5.31 per cent to $100.84 per share at 11.10am AEDT.
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