‘Dud deal’: Board stoush over Humm’s $335m sale heats up

The majority of Humm directors on Monday expressed their rationale for the deal with Latitude, which will mainly be paid in Latitude shares, by saying it was a “highly compelling value proposition” for the company to expand in the buy now, pay later as it battles an industry-wide decline in margins.

Abercrombie responded it was “ironic” to cite the competitive environment as a reason to sell, arguing all players including Latitude were exposed to the same economic forces. “The fact remains that this is a dud deal for shareholders, as it stands, and should be rejected outright,” he said.

Humm’s ASX announcement on Monday said Humm Consumer Finance was a “high quality business,” but unaudited accounts showed it had been unprofitable for the four months to April, after adjusting for the reversal of a “non-cash macro overlay provision.” Humm said the division was being affected by the woes of the buy now, pay later sector, with margins being crunched across the industry.

Abercrombie responded: “The announcement from humm today attempts to paint a negative picture of humm’s consumer business to drive support for a deal with Latitude. The underlying performance of the business is solid.”

Humm rose 4.1 per cent on Monday to 76¢.