Credit Corp is trying to buy Humm Group in a $385 million deal that aims to grow its lending footprint and debt portfolio, but the move lands in the middle of governance tensions that could shape how much value shareholders actually see.
Humm sits in a tricky corner of the non-bank finance world, offering business loans, credit cards and buy now pay later services for purchases up to around $50,000 through merchant partners. It has already been through one failed take-private attempt this year and investor frustration has been building as questions mount over board decisions, financial reporting and how earlier offers were handled.
Credit Corp’s latest proposal values Humm at 77 cents per share on a non-binding and indicative basis, lodged in late November, and the company now says it is “considering” the approach and is willing to keep talking. At the same time Credit Corp is signalling it may bypass the board and go directly to investors with a reduced 72 cents per share offer for 50.1% of the register if discussions stall, while it still seeks access to detailed due diligence it has not yet received.
The timing is sensitive because Humm is already under pressure from an activist campaign seeking to remove three directors via an extraordinary meeting after the collapse of a $286 million management-linked bid that came in below a previous $335 million proposal for part of the business from another financial services group. On top of that one director recently declined to sign the full-year accounts due to accounting disagreements, a senior finance executive has resigned after several years in the role and shareholders at the latest annual meeting confronted the board over delayed accounts and shifting disclosure.
Taken together, the takeover approach looks like it could reset the company’s future, but it also seems to heighten the risk that governance disputes, delayed transparency and competing views on valuation might drag out any deal or weaken negotiating power. Investors now appear to be weighing not only the price on the table but also whether the current board, activist investors and the bidder can align quickly enough to lock in a stable outcome in a tougher credit and regulatory environment for non-bank lenders.
