BERLIN (Reuters) – The Japanese Softbank Group Corp. will acquire a stake of 5.6 percent in Wirecard for around 900 million euros ($ 1 billion), said the German company on Wednesday.
FILE PHOTO: The logo of the SoftBank Group Corp. will be shown at the SoftBank World 201
Wirecard's shares rose by 10 percent at the top of Germany's blue chip analysts at index as analysts welcomed the investment as a vote of confidence in the business, with which the Munich-based company can expand its activities in Asia.
Under the agreement, Wirecard will issue bonds exclusively to a subsidiary of Softbank, which will be converted into 6.92 million Wirecard shares after five years, which currently equates to approximately 5.6 percent of the company.
The conversion price of 130 euros per share corresponds to a premium of 5 percent on the closing price of Wirecard on Tuesday. Shareholders will vote on issuing the bonds at their annual meeting on 18 June.
Wirecard, founded in 1999, has pushed Commerzbank out of the German blue-chip DAX index last year as it benefited from an accelerating global trend towards digital payments, that of e-commerce.
However, equities have fallen by about 38 percent since the beginning of September, impacted by the negative sentiment in technology and Financial Times reports. They said the Asian business staff had increased their reported revenue.
Last month, Wirecard said that a law firm had determined from the outside that local employees might have committed crimes in their Singapore office, but these were not material to the financial position of the German payment company.
Wirecard and Softbank have signed a strategic partnership to work together on digital payments.
As part of this, Softbank will support Wirecard's expansion into Japan and South Korea, providing opportunities to work with other companies in its portfolio in areas such as data analytics / AI and innovative digital financial services.
"This potential partnership will extend our reach and our products to the East Asian markets, further strengthening our position in Asia," said Wirecard CEO Markus Braun in a statement.
Baader Helvea analysts said the investment was "clearly positive". This would enable Wirecard to leverage its product portfolio in Japan and South Korea and possibly even accelerate its strong organic growth momentum.
Credit Suisse acted as financial advisor to SoftBank and Sullivan & Cromwell LLP as legal advisors. Noerr LLP and Gibson, Dunn & Crutcher LLP are legal advisors to Wirecard.
Reporting by Caroline Copley; Editing by Michelle Martin / Keith Weir