The Latitude Financial Group Limited (ASX: LFS) initial public offer (IPO) has been pulled… again. Here’s why.
About Latitude
Latitude Financial describes itself as a leading digital payments, instalments and lending platform, with 2.6 million customer accounts and more than 1,950 merchant partners across Australia and New Zealand. It has products like LatitudePay, Genoapay
, Gem Visa, GO Mastercard and Creditline. Latitude also offers lending products like credit cards, personal loans and motor loans.
Basically, it’s the old GE Finance business spiced up with a new Afterpay Touch Group Ltd (ASX: APT) like product called LatitudePay.
What’s Going On With The IPO?
Latitude CEO Ahmed Fahour has confirmed the consumer lender’s IPO has been pulled, citing the sliding offer price and declaring the failure as “disappointing”.
This was the second time the owners of Latitude have attempted to publicly list the business and with it failing a second time around, it’s hard to imagine the business will ever get listed on the ASX.
Latitude first tried to sell shares between $2 and $2.25, then set the price at $2. It was then reported by the Australian Financial Review that the owners and investment banks pitching the IPO lowered the price to $1.78 per share.
Today, the AFR is reporting that the float has been pulled due to investors saying, “Latitude’s earnings quality and visibility was poor given limited historical data in the prospectus, and there were growing concerns over whether lending to over-indebted Australian consumers would be considered responsible in the eyes of regulators.”
Ahmed Fahour said in an email to Latitude staff this morning, “Feedback from investors has been overwhelmingly positive and although demand has been strong, some investors have not been prepared to offer a price per share that reflects a fair value given the strength and performance of our business”.
In other words, investors think the business is worth less than what the CEO, owners and investment banks were trying to sell it at.
What Now?
I can’t imagine Latitude will be listing on the ASX anytime soon, if ever. If it does, it would have to be in a buoyant sharemarket and by all indications, at a lower price.
If you were interested in the IPO but now need to find somewhere else to put your money, you could consider Flexigroup Limited (ASX:FXL). Or, if you aren’t interested in the saturated BNPL sector, you may want to consider one of the companies mentioned in the free report below.
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Disclosure: At the time of writing David owns shares in Afterpay.
