humm Group (ASX:HUM) receives takeover bid from Chair’s TAG at 35% premium

Why has The Abercrombie Group proposed a premium all-cash bid to acquire full control of humm Group Limited?

humm Group Limited (ASX: HUM), the diversified consumer and commercial finance provider, has received a non-binding indicative proposal from The Abercrombie Group Pty Ltd to acquire all outstanding shares in the business that it does not already own. The offer, submitted after market hours on June 23, 2025, values humm Group’s remaining equity at AUD 0.581 per share in cash, a 35% premium to the day’s closing price of AUD 0.43. The Abercrombie Group is the family office of humm Group chair Andrew Abercrombie and already controls a 26.6% stake.

The offer was made via a proposed scheme of arrangement, a structure that would require approval from both shareholders and the Federal Court of Australia. If implemented, the deal would consolidate full control of the Sydney-headquartered financial services provider under its chair, pending due diligence and mutual agreement on a scheme implementation deed.

What are the key conditions and mechanics of the TAG bid for humm Group and why is it non-binding?

The indicative proposal from The Abercrombie Group is non-binding and subject to multiple conditions. It is contingent upon completion of satisfactory due diligence and the signing of a mutually agreed scheme implementation deed between TAG and humm Group. Further stages of the process would include customary approvals from shareholders and judicial authorities.

The offer only applies to shares not already held by TAG and its associates. The proposed cash consideration would be adjusted downward for any dividends or capital returns declared by humm Group before completion. Importantly, the scheme structure means minority shareholders would vote on the deal, with approval thresholds governed by Australia’s Corporations Act.

The board of humm Group has clarified that shareholders are not required to take any action at this time. There is no certainty the discussions will lead to a binding agreement or successful transaction.

Who is evaluating the proposal within humm Group and how is governance being maintained during this process?

Given the direct involvement of board chair Andrew Abercrombie on the buy-side, humm Group has established an Independent Board Committee (IBC) to assess the proposal without conflict of interest. The IBC is composed of three independent non-executive directors: Andrew Darbyshire, Teresa Fleming, and Robert Hines.

The committee has granted TAG a four-week period to perform targeted due diligence, after which a binding offer may be negotiated. Legal adviser K&L Gates has been appointed by the IBC to represent humm Group, while TAG has retained Gresham Partners as financial adviser and MinterEllison for legal counsel.

Institutional investors will likely scrutinize the governance safeguards given the insider-led nature of the transaction. Analysts say such structures—when handled transparently and with independent committee oversight—are viewed as acceptable if fairness opinions are conducted by third-party valuation firms.

How does the $0.581 offer compare with humm Group’s recent trading history and market performance?

The AUD 0.581 cash offer represents a 35% premium over the last traded price of AUD 0.43 and is materially higher than the stock’s average trading range over the past three months. humm Group shares had been under pressure due to rising rates, elevated credit losses across the BNPL sector, and investor fatigue toward non-bank lenders facing tightening regulatory conditions.

The market reaction is likely to be positive given the uplift in valuation implied by the offer, particularly for long-term shareholders who entered before the downturn in 2022. While some investors may argue the bid undervalues the company’s longer-term platform potential and geographic diversification, the cash certainty amid volatile capital markets could appeal to others.

Analysts suggest that the proposed pricing may deter rival bidders unless a strategic acquirer sees unique synergy value. The involvement of the current board chair as acquirer complicates any potential competing offers unless governance processes explicitly invite them.

What are humm Group’s core operations, revenue streams, and international footprint in 2025?

humm Group Limited is a financial services provider focused on point-of-sale financing, commercial lending, and credit card offerings across multiple geographies. The Australian-listed firm has operations in Australia, New Zealand, Ireland, the United Kingdom, and Canada. Its revenue model is anchored in interest income, merchant fees, and credit card usage.

Its key business segments include Commercial Lending (primarily across Australia and New Zealand), Point-of-Sale Payment Plans, and branded consumer credit cards. Australian offerings include humm90, Lombard, and Once cards, while the New Zealand portfolio features products such as Farmers Finance Card, Q Mastercard®, and Flight Centre Mastercard®.

Although the buy-now-pay-later sector has seen a post-pandemic correction, humm Group’s diverse revenue mix and ongoing profitability in commercial lending differentiate it from pureplay BNPL providers. Institutional sentiment has recently shifted toward financial services firms with recurring cash flow and moderate leverage, placing humm Group in a relatively favorable comparative position.

What is the broader M&A context around this bid and how are investors responding to the proposal?

The takeover offer arrives amid a broader wave of consolidation in Australia’s non-bank financial services and fintech sectors. Analysts have noted increasing interest from family offices, private equity firms, and existing founders seeking to privatize undervalued listed entities. Rising interest rates and compliance burdens have made scale and stable funding bases more critical than ever.

In this environment, investor sentiment toward the TAG bid has been cautiously optimistic. Some institutional holders see the offer as an opportunity to exit at a premium, especially given limited liquidity in the stock. Others are expected to wait for an independent expert valuation before deciding whether the AUD 0.581 price adequately reflects fair value.

The announcement has not yet disclosed any revised guidance or impact on financial performance for FY25, and humm Group has emphasized that day-to-day operations remain unchanged during the evaluation period.

What are the possible future scenarios if TAG and humm Group progress to a binding scheme implementation deed?

If due diligence is successfully completed and a scheme implementation deed is executed, humm Group would likely publish a scheme booklet for shareholders outlining full financial details, independent expert reports, and voting instructions. A shareholder vote would then be conducted, requiring approval by 75% of votes cast and 50% of shareholders by number.

Following court approval, settlement would take place, and humm Group could be delisted from the Australian Securities Exchange, becoming a wholly owned private entity of The Abercrombie Group. The transition may enable more flexible capital allocation and long-term planning for the business, though minority investors would lose public market access and upside potential.

Conversely, if no binding agreement is reached, the board may resume evaluating other strategic options, including third-party offers, internal restructuring, or capital returns.