MoneySmart rejects acquisition offer from rival MoneyHero

Personal finance portal MoneySmart Group has declined an US$8 million (S$10.5 million) offer from its competitor MoneyHero Group to acquire all its shares on the same day the proposal was made.

In a media statement issued on the evening of Aug 23, MoneySmart said its board has unanimously determined that the offer is “neither serious nor credible” and that it will not entertain it.

“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,” it said.

Earlier on Aug 23, MoneyHero had made the non-binding offer to acquire all shares of MoneySmart, but said the US$8 million value could be adjusted following a due diligence process.

The payment would consist of new MoneyHero shares, with any additional valuation to be settled in cash.

While MoneyHero aims to acquire 100 per cent of MoneySmart, it said it is also willing to buy any number of shares from individual investors.

In rejecting the offer, MoneySmart also noted that the proposed merger does not align with the firm’s strategic objectives and would fail to deliver value to its shareholders.

“In addition, the adjoining press release from MoneyHero makes reference to a recent private share transaction which was driven by specific circumstances and not representative of MoneySmart’s market value or future prospects,” it said.

MoneySmart Group chief executive Vinod Nair said the company’s decision was a “clear and definitive no”, adding that both 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,” Mr Nair said, adding: “We believe that our current plans set up MoneySmart to succeed in the long term.”

On its offer, MoneyHero chief executive Rohith Murthy said the buyout offer for MoneySmart reflects the “strategic value” of combining both companies. 

“This acquisition will further strengthen our leadership in greater South-east Asia, delivering enhanced products, services and technological innovation,” Mr Murthy added. 

“We believe the synergies from this merger will drive significant value for our shareholders and customers.”

MoneyHero was founded in Singapore in 2014 as CompareAsia Group.

It rebranded as Hyphen Group after acquiring product review platform Seedly from fintech firm ShopBack in 2020.

It operates online platforms that compare and recommend personal financial products such as credit cards, personal loans, mortgages and insurance.

These include personal finance websites SingSaver and Seedly in Singapore, its largest market, and similar platforms in Hong Kong, Taiwan, Malaysia and the Philippines. 

MoneySmart also operates online financial product comparison platforms, and is considered to be a rival of MoneyHero.

In April, MoneySmart failed in its court bid to stop a former executive from working for CAG Regional Singapore, a company under the MoneyHero group, on the basis of a non-compete clause, as well as a confidentiality clause.

The potential acquisition comes after MoneyHero laid off 80 employees in July as part of a cost-cutting measure.

Mr Murthy told staff in an e-mail that the layoffs were “strictly about enhancing MoneyHero’s long-term financial health and profitability” and that there were “no larger issues at play”.

In October 2023, MoneyHero debuted on the Nasdaq stock exchange in New York after merging with Bridgetown Holdings, a special-purpose acquisition company backed by PayPal co-founder Peter Thiel’s venture firm and Hong Kong tycoon Richard Li’s Pacific Century Group.

The company’s share price has plunged around 77 per cent since its debut, closing at US$1.25 on Aug 22, giving the firm a market capitalisation of US$49.28 million.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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