Brazilian software firm Linx SA’s shareholders backed a takeover offer from StoneCo Ltd, its chief executive said on Tuesday, paving the way for the U.S.-listed card processor to offer its business clients additional services.
The vote ends a bidding war that started August pitting StoneCo against Brazilian software firm Totvs SA.
StoneCo raised its offer on Tuesday and proposed to pay 33.56 reais plus 0.0126774 Stone Class A common share per Linx share, raising the deal’s value to 6.8 billion reais ($1.28 billion).
The takeover is aimed at transforming StoneCo into an integrated provider of software and payments services for retailers. It comes at a moment when new competitors and technologies – such as instant payments platform Pix, launched this week by the country’s central bank – are upending the payments industry in Brazil.
The deal, which still faces scrutiny from antitrust and other regulators, will also give StoneCo access to some bigger retailers who Linx counts among its clients. The card processor has traditionally focused on small and mid-sized merchants.
StoneCo CEO Thiago Piau said the deal will allow the company to offer more competitive prices on a broader set of products after the Linx acquisition.
Linx will become a new unit of StoneCo, managed by executives from both companies.
Despite winning approval from 63% of shareholders, the deal drew fire from some who said it would give Linx’s founders Alberto Menache, Nercio Fernandes and Alon Dayan special benefits, such as non-compete and hiring contracts. But Brazil’s securities regulator allowed them to vote their combined 14.4% shares in favor of the transaction.
Piau said StoneCo intends to seek new acquisitions in the tech, retail and payments arena, but he added there was likely to be a pause immediately following the Linx deal.
Source: Reuters.com