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Wirecard shares surge on ex-chair comments about potential acquisition offer


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According to Market Intelligence, April 2023

Wirecard shares surge on ex-chair comments about potential acquisition offer

Wirecard AG's share price rose Dec. 28 after former chairman Klaus Rehnig said he expected that an international investor would soon launch an acquisition offer for the financial technology company.

At 12:43 p.m. CET, Wirecard was trading up 3.73% at €132.15 on the Xetra electronic trading platform of the Frankfurt Stock Exchange. The price increase was even stronger in floor trading as the stock was up 5.57% at €131.90 at 12:59 p.m. CET. The shares had reached an intraday high of €132.95 on Xetra and of €132.70 on Frankfurt's floor, compared to the prior day close of €127.30 on Xetra and of €125.60 on the floor.

Rehnig, who was Wirecard's first investor and chairman of the supervisory board until 2008, told Handelsblatt that he would sell his remaining stake in the company in the event of a takeover bid. "I expect that an international corporation will soon come and want to buy Wirecard," he said in a Dec. 27 interview.

Shareholders should then expect a premium over Wirecard's market value of 30%, 40% or 50%, Rehnig said. He also hinted the new investor could come from China, and said this would be an offer that any "reasonable" investor should accept. Rehnig said he did not think that the German government would stand in the way of a Chinese buyer even though it had recently tightened acquisition rules for investors, particularly from China.

Founded in 1998, Wirecard started as a small electronic payment-processing business and it has grown rapidly in recent years as the digital-payments space has expanded. The company caught the eye of heavyweight market investors in September when it replaced Germany's second-largest lender Commerzbank AG on the Dax.

At €16.36 billion, Wirecard's market capitalization is currently higher than Commerzbank's €7.22 billion as well as Germany's top lender Deutsche Bank AG, which has a market capitalization of €14.35 billion.

Despite the volatility of the share price, Wirecard has the potential to double its market capitalization in the future as it stands to gain from the growing cashless payments market, Rehnig told Handelsblatt.

As global payment giants such as U.S.-based Visa and Mastercard, Japan's JBC and China's Alipay are growing by 10% to 20% per year, Wirecard will benefit from that growth as the processor of their payments, Rehnig said. Wirecard's IT platform offers it a competitive advantage as it is difficult to replicate, Rehnig said. The only way to acquire the company's know-how is to buy it as a whole, he said.