The Afterpay Ltd (ASX: APT) share price is pushing higher on Friday morning.
At the time of writing, the payments company's shares are up 2.5% to $122.85.
Image source: Getty Images
What did Afterpay announce?
This morning Afterpay announced the successful completion of the tender offer made to eligible participants under the Afterpay US 2018 Equity Incentive Plan.
As a result of this, the company's underlying interest in the Afterpay US business has now increased to approximately 91%. This is up from 80% at the end of the first half of FY 2021, but was a touch short of its target of 93%. This appears to be due to some US participants not taking up the tender offer.
Why is Afterpay doing this?
In February, management explained that this plan aligns with Afterpay's objective to simplify its corporate structure while ensuring that private equity firm Matrix and US holders remain aligned with the ongoing interests and success of Afterpay as a whole.
It also believes the move will be highly strategic and accretive. Management notes that the US market represents Afterpay's largest opportunity globally. It also currently contributes 8.1 million active customers and 43% of underlying sales.
Furthermore, management still sees a long runway for growth in the country. It notes that customer acquisition and cohort purchase frequency, together with merchant acquisition rates, bode well for continued strong medium-term growth in the US.
Is the Afterpay share price in the buy zone?
A number of leading brokers believe the Afterpay share price is in the buy zone at the current level.
One of those is Morgan Stanley. This week it put an overweight rating and $149.00 price target on its shares. This was partly due to the aforementioned US business, which it notes is expanding even quicker than it expected.
Its data appears to show that US app downloads in March were triple the number recorded a year earlier. This could be positioned Afterpay for another impressive full year result in August.
