Shares of ThinkSmart (LON: TSL) are surging on Monday following the announcement of Square Inc's (NYSE: SQ) deal to acquire Afterpay.
ThinkSmart revealed that Afterpay has the right to exercise its call option to purchase the remaining shares in Clearpay from ThinkSmart if there is a change in control at Afterpay.
In addition, if the shares of Afterpay are no longer listed and it decides to exercise the option, then Afterpay may only elect to pay the exercise price for Clearpay in cash.
The exercise price for the call option will be determined by the same pre-agreed valuation principles whether or not the option is exercised early. ThinkSmart's 10% holding in Clearpay UK was last valued at £106.6m on 31 December 2020.
Afterpay + Square! https://t.co/4UVDOtyI8a
— jack (@jack) August 1, 2021
At the end of June, Clearpay UK represented 13% of Afterpay's active customers.
Ned Montarello, Executive Chairman of ThinkSmart, said: “The combination of Afterpay and Square is exciting with complementary service offerings and customer bases. For ThinkSmart's shareholders, we believe this translates to a very positive and material impact on Clearpay UK, which we retain a 10% shareholding in.
“That growth of Clearpay UK, which it is clear today is continuing unabated, has been phenomenal adding 2.1m customers in the first 2 years of trading.”
ThinkSmart's share price rose over 50% following the news. It is currently trading at 88p, up 44.26%.
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