Lloyds Banking Group has signed a share sale and purchase agreement with Curve, a digital wallet provider, in a GBP 120 million bid.
This comes despite shareholders’ disappointment regarding the value of the transaction, which falls short of Curve’s ambitions. Yet, the company’s board strongly believes that the sum is representative of the best available path for Curve’s creditors and shareholders.
Pushback from shareholders
Since the initial talk about the acquisition, Sky News reported that some early Curve investors were furious about the price of the bid and the proposed distribution of proceeds. IDC Ventures, the company’s biggest external shareholder with a 12% stake, mentioned its concern regarding the conduct of Curve's management and board during the process. Issues on the company’s governance and ownership began to be disputed, and IDC is reserving all legal rights pending further developments.
The majority shareholder also believes that Lloyds’ choice to contemplate proceeding with a transaction that does not reflect the best interests of the company, or its shareholders, is surprising. IDC does not support the proposed bid and doesn’t believe that it could be implemented without its support, as the company will take steps to protect shareholder interests and expects the board and any prospective purchasers to act responsibly.
IDC, which first invested in Curve six years ago and has participated in or led several funding rounds, appointed the UK-based law firm Quinn Emanuel to advise it on the situation. Additionally, efforts to remove Curve’s chair and founder were voted down at a shareholder meeting in early October.
Curve representatives argue that the company will go bankrupt if the Lloyds sale is not accepted. The fintech has raised at least GBP 250 million in funding since it was established, and Lloyds hopes that buying Curve will allow the fintech to recover and build smarter online payment systems amidst growing pressure on Apple to open its services to rivals.
