MoneySmart rejects MoneyHero’s S$8 million acquisition offer

NASDAQ-LISTED MoneyHero Group has made a non-binding offer of US$8 million to acquire its competitor, MoneySmart.

However, MoneySmart on Friday (Aug 23) announced that it has rejected the unsolicited offer.

The board of the personal finance company unanimously determined that the approach was “neither serious nor credible”, and that it will not be entertained.

“The manner in which the offer was made public, with no prior discussions with MoneySmart management, is highly unusual and has not engendered MoneySmart’s confidence in, or openness to, such discussions,” the company said.

It added that the proposed merger does not align with its strategic objectives and would fail to deliver value to shareholders.

MoneySmart founder and chief executive Vinod Nair said: “The two businesses currently operate in a similar space but are on diverging paths in terms of strategy, financial sustainability and outlook.

“Our focus remains on advancing our products, services and innovation, being a trusted partner to customers and executing our growth strategy.”

The company noted that it achieved profitability in 2023 while generating positive free cash flow, which reflects the company’s “robust” financial health.

The offer

The move by MoneyHero came after the company laid off 80 employees in July to cut costs and improve its financial profitability. It also conducted two rounds of layoffs in 2022.

The Singapore fintech company operates online personal finance platforms that recommend financial products, including Seedly and SingSaver in Singapore. It also has a presence in Hong Kong, Taiwan and the Philippines.

MoneySmart is a personal financial marketplace owned by Singapore-based Catapult Ventures.

Rohith Murthy, chief executive of MoneyHero, expected the purchase to strengthen the company’s position in Greater South-east Asia’s personal financial and insurance landscape, delivering improved products, services and technological innovation.

Under the terms of the offer, MoneyHero valued MoneySmart at US$8 million, with potential valuation upside, said MoneyHero on Thursday.

The consideration of US$8 million would have been paid in new MoneyHero shares; the potential additional upside would have been paid in cash, contingent on the results of a due-diligence process. 

Even though MoneyHero intended to fully acquire MoneySmart, the company said it was also exploring the purchase of any number of shares from individual shareholders.

It said the consideration and potential upside reference MoneySmart’s recent capital reduction, based on filings made with the Accounting and Corporate Regulatory Authority of Singapore. 

According to filings seen by The Business Times, MoneySmart’s parent company Catapult Ventures returned to the black for its latest financial year ended Dec 31, 2023. It posted a profit after tax of S$434,520 for the period, from a loss of S$569,352 the year before.

Revenue stood at S$46.9 million for the financial year, up from S$39.8 million.

MoneySmart’s plans to list on the Singapore Exchange through a reverse takeover fell through in July 2023 due to poor market conditions. Hotel operator Asia Pacific Strategic Investments had been in talks to acquire its parent company in a deal valued at US$161.7 million.

In an interview with BT in February 2024, Nair said the company was looking at a direct listing instead, as this would provide it with more control over the listing process and the timing of going public.

MoneyHero noted that its offer reflected a premium for MoneySmart’s business.

Murthy said: “Given MoneySmart’s recent share buyback, we believe we’ve made a fair and compelling offer that benefits both sides… We believe the synergies from this merger will drive significant value for our shareholders and customers.”

MoneyHero listed on Nasdaq in October 2023. This was after it merged with special-purpose acquisition company Bridgetown, which is backed by PayPal co-founder Peter Thiel’s venture firm and Hong Kong tycoon Richard Li’s Pacific Century Group.