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¢.
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