good afternoon great to have your company on calkin tv i'm james preston and you're watching
the buzzing trends today we're taking a look at square shareholders and what can be expected
following the approval of the after pay deal the 29 billion us dollar after pay square deal
overcame a major challenge after the new york stock exchange listed u.s firm square saw its
shareholders back a plan to issue more stock for the deal the asx listed by now pay later
major after pay limited informed the exchange that the u.s firm's shareholders have given
a nod to the issuance plan it follows the release of a scheme booklet for sharing further details of
the deal on friday afterpay shareholders who are expected to vote on the transaction in december
will have the option of taking u.s listed square shares or accepting asx listed square shares
the deal will also require the approval of australian regulatory authorities including the
foreign investment review board afterpay said that square stockholders have approved the issuance of
square class a common stock including the shares underlying chess depository interest to after
pay shareholders as contemplated by the scheme implementation deed entered into between square
lani sand after pay announced on the 2nd of august 2021 getting approval for this issuance
from squares shareholders was one of the major conditions of the transaction which means that
after pay can now move ahead with other plans after pay expects the transaction to reach an
end during the first quarter of 2022 it's the biggest buyout known in the history of australia
so let's take a look at exactly what the afterpay square deal entails
the record-breaking deal comes as after pay which provides short-term interest-free installment
loans is facing increasing competition from banking giants including commonwealth bank
city and payments giant paypal after the transaction square will integrate afterpay
into two of its existing ecosystems aimed at strengthening the connection between its seller
and cash app ecosystems and unlocking cross-sell opportunities with afterpay
square shares advanced 6.4 in october while the afterpay share price only rose 3.8
after pays shareholders will get 0.375 shares of square stock for each one they own of the buy now
pay later firm the us firm can also choose to pay one percent of the purchase price with cash
well let's take a quick break now but after these messages
we'll take an in-depth look at the recent performance of both after pay and square
along with a look at the future of the buy now pay later space
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thanks for joining us james with you on calkin tv for the buzzing trends this edition focusing
squarely on after pay and square let's take a look at their performance throughout october by now
pay later providers including afterpay and zipco have seen their share prices surge as the pandemic
drove rapid growth in online shopping but the wave of large players entering the sector is expected
to put pressure on profit margins and some analysts expect more corporate deals in the sector
there was no major development from afterpay side in october however there were developments in the
australian payment space that likely influenced its valuation the prices of two firms are
connected of late due to the nature of the deal involving 0.375 square shares in exchange for one
after pay share square shares advanced 6.4 in october while the afterpay share price rose by 3.8
and the reserve bank of australia's decision to ban no surcharge may have had a negative impact on
afterpay shares in the past month also the current value of afterpay's takeover by a square based on
the current exchange rates and the latest square share price of u.s 252 dollars and 48 cents comes
up as 127 aussie dollars and 10 cents per after pay share the purchase by square the payments firm
of twitter's co-founder jack dorsey underlined the growing popularity of an industry that has upended
traditional consumer credit the deal is said to be the largest takeover in australian history
afterpay co-founders nick molnar and anthony eisen who have each become billionaires due to
the company's rise have vowed to continue their involvement at square and have been given senior
executive positions in the post-merger business the takeover of afterpay is a sign of the fierce
competition for young financial services customers who are increasingly turning away from traditional
banks in favor of fintechs the trend is sparking a major competitive response from the big four banks
with the commonwealth bank this week announcing a landmark move into cryptocurrency as well as
going head-to-head with afterpay by launching its own buy now pay later product earlier this year
cba's key rival westpac in contrast has formed a partnership with afterpay
following the buy now pay later company to sell deposit accounts to customers
and there are also plans to sell mortgages through the app
westpac's financial results presentation this week argued it was making progress in the millennial
market pointing to growth in accounts targeted at adults under 30 and a recent revamp of its banking
app it's a very bright looking future for the buy now pay later space and at kalkine we will keep
you across every single development that's all for now though stay tuned to kalkine tv for the
latest market updates business news and exclusive interviews i'm james preston signing off for now