Afterpay (ASX:APT) share price on watch after Square takeover update

Here's the latest on the Afterpay-Square deal…

| More on:
A happy man using PayPal to pay.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Afterpay Ltd (ASX: APT) share price will be one to watch on Thursday.

This follows news that its takeover by Square has taken a major step forward this morning.

Why is the Afterpay share price on watch?

The Afterpay share price could be on the move today after the payments company released an update on Square's takeover proposal.

According to the release, Square shareholders have now approved the issuance of Square Class A common stock (including the shares underlying CHESS Depositary Interests) to Afterpay shareholders as contemplated by the scheme implementation deed the two parties entered into in August.

Approval for this issuance from Square shareholders was one of the major conditions of the transaction.

As a result, Afterpay can now push ahead with things. This includes holding its first court hearing later today. After which, the company expects to release its scheme booklet tomorrow, subject to court approval and following registration with the Australian Securities and Investments Commission.

If all goes to plan, Afterpay expects the transaction to close during the first quarter of calendar year 2022.

What is the current value of the takeover?

In August, the two parties agreed an all-scrip deal, which will see Afterpay shareholders receive a fixed exchange ratio of 0.375 shares of Square Class A common stock for each Afterpay share they hold on the record date.

Based on the current exchange rates and the latest Square share price of $252.48 (A$338.92), this equates to $127.10 per Afterpay share.

Due to the Square share price trading sideways since announcing the deal, this is broadly in line with the takeover price at the time the offer was made. It also represents a premium of 4.5% to the current Afterpay share price of $121.53.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Young girl drinking milk showing off muscles.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a great end to the trading week for ASX investors today.

Read more »

Hands reaching high for a trophy with a sunset in the background.
Record Highs

The ASX 200 Index is on its way to another all-time high today. Here's why

These blue chip stocks are driving the index towards a new record today...

Read more »

Group of friends trading stocks on their phones. symbolising the 3 most traded ASX 200 shares today
Share Market News

3 ASX mining stocks topping the most-traded list in October

Chinese stimulus news and company announcements likely contributed to the higher trading activity.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Share Gainers

3 ASX 200 stocks smashing the benchmark this week

These three ASX 200 stocks are leading the charge this week. Here’s how.

Read more »

Two people tired and resting after sports race.
Broker Notes

Fundie rates 2 ASX 200 stocks in short-term pain but with long-term gain potential

Blackwattle Investment Partners sees these 2 ASX 200 stocks as worthy of a buy and hold strategy.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why A2 Milk, EOS, GQG, and Mineral Resources shares are racing higher today

These shares are ending the week strongly. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Megaport, Pilbara Minerals, Vysarn, and WiseTech shares are falling today

These shares are ending the week in the red. But why?

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »