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Latitude shores up $3b valuation with new investor as it mulls an IPO

Ahmed Fahour-led Latitude Financial Group has gained a $3 billion valuation ahead of another attempt at a public float with Japan’s Shinsei Bank agreeing to acquire a 10 per cent stake from current shareholders for $300 million on Wednesday evening.

Latitude said Shinsei began discussions with Latitude’s owners, KKR, Varde Partners and Deutsche Bank in 2020 about taking a strategic stake.

Ahmed Fahour-run Latitude Financial Group has aspirations to to be trading on the ASX by the end of the first half.

Ahmed Fahour-run Latitude Financial Group has aspirations to to be trading on the ASX by the end of the first half. Credit:Elke Meitzel

As part of the agreement, Latitude and Shinsei will form an alliance to explore mutually beneficial growth opportunities in the Asia Pacific region. Shinsei is expected to gain a board seat at Latitude once it has received regulatory approvals to lift its stake to 10 per cent.

“Shinsei’s investment highlights the attention overseas investors are showing in Latitude as the leading provider of interest free shopping and consumer finance, offering customers a broader range of products that responsibly meet their needs,” said Mr Fahour.

“This substantial investment and strategic alliance will help accelerate our growth plans in Australia and New Zealand, particularly with interest free shopping and the boom in the home economy, while Shinsei’s expertise in financial services will assist with Latitude’s overseas expansion.”

Last month Latitude changed its corporate structure, in another sign that Australia’s biggest non-bank lender is mulling another attempt at a public listing.

The board of Latitude’s holding company converted the entity from a private to a public company and altered its constitution this month. The move is a necessary precursor to the consumer finance group landing on the ASX, a feat that it failed to pull off in 2019.

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Latitude withdrew its last public float after failing to find sufficient investor support for the $1 billion share sale it was contemplating. The float would have been the biggest of the year valuing the group at around $3.2 billion. Since then, Latitude has successfully developed its buy now, pay later (BNPL) business LatitudePay and watched valuations of stocks like Afterpay soar to more than 100 times its 2023 expected earnings.

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