By Sarah Sloat
Shares in Wirecard AG (WDI.XE) rose sharply Wednesday after a $1-billion agreement that could see Japan's SoftBank Group Corp. (9984.TO) take a 5.6% stake in the German payments company.
In the agreement, SoftBank will invest about 900 million euros ($1.01 billion) in Wirecard via convertible bonds representing approximately 5.6% of common stock, allowing a SoftBank affiliate to buy Wirecard shares for EUR130 each, the German group said.
Wirecard shares opened higher on the news, with the Japanese conglomerate's investment viewed as a vote of confidence in the company, whose shares have been battered over the past months by accusations of accounting irregularities in Asia. Wirecard has denied wrongdoing.
At 0800 GMT, Wirecard shares traded at EUR133.50, up 8.1%.
Analysts at Hauck & Aufhaeuser said the deal would boost confidence for Wirecard's payment platform and increase the credibility of Wirecard's Asian business with long-term growth potential.
"This strongly underpins our view that Wirecard's state-of-the-art payment platform is best-in-class while the stock at current levels offers a highly interesting investment opportunity," Hauck & Aufhaeuser said.
As part of the transaction, SoftBank and Wirecard signed a memorandum of understanding for a partnership in digital-payment solutions that will help Wirecard extend its reach in Asia.
"SoftBank Group will seek to support Wirecard's geographic expansion into Japan and South Korea, as well as providing collaboration opportunities within SoftBank Group's global portfolio in digital payments, data-analytics/AI and other innovative digital financial services," Wirecard said.
Wirecard is due to release its audited 2018 results on Thursday. It had postponed that release for three weeks to allow a law firm's review of its accounting issues to be taken into account.
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(END) Dow Jones Newswires
April 24, 2019 04:26 ET (08:26 GMT)
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