Afterpay shareholders strongly back Block’s $39bn deal in lopsided vote

Australia’s largest ever corporate merger has just one more Spanish hurdle to overcome after investors strongly backed the deal.

Anthony Eisen, co-CEO of Afterpay says deal is about “seizing a new and powerful opportunity”. Picture: Natalie Grono

Afterpay shareholders have overwhelmingly approved the BNPL company’s $39bn merger with Jack Dorsey’s US payments giant Square, now named Block, following a week-long delay.

The virtual meeting was pushed back due to a delay in approval from the Bank of Spain, whose licence allows Afterpay to offer its products in Europe.

Afterpay has still yet to receive that approval, but has amended the scheme so that the merger can proceed as long as the bank approves by April 14.

Nearly 200 million proxy votes were received ahead of Tuesday’s meeting, with 99.79 per cent of votes cast in favour of the deal. Just 0.05 per cent of were against it, while 0.16 per cent of votes were left open.

No questions were asked at the meeting and the deal – which required a 75 per cent majority of shareholder support – looks now set to go ahead, following a similarly lopsided shareholder vote from Square investors last month.

Afterpay and Mr Dorsey‘s payments company Square agreed to an all-scrip deal in August that will see Afterpay shareholders receive a fixed exchange ratio of 0.375 shares of Square Class A common stock for each Afterpay share they hold.

Block will have a secondary listing on the ASX, meaning investors will be able to choose between NYSE-listed or domestic Australian shares.

Afterpay shareholders will own about 18.5 per cent of the combined company in what will be the largest merger Australian corporate history.

Block CEO Jack Dorsey has spoken of a ‘shared purpose’. Picture: Jim Watson/AFP

“Since our first meetings with the Block team, we’ve known that we share a vision of financial empowerment. And while we’ve been limited in the extent that we can bring our companies physically together since announcing the transaction, I’ve been proud to see how the teams of both companies plan to design, optimise and integrate post- completion,” Afterpay co-CEO Anthony Eisen told shareholders on Tuesday.

“We’ve built a phenomenal movement that’s attracted some of the world’s leading talent across all facets of our business.

“And it makes me very proud to think that with the support of our shareholders, this team will be joining forces with Block and seizing a new and powerful opportunity.”

Afterpay’s chair Elana Rubin said that shareholders could be confident that the Bank of Spain would issue the necessary approvals, allowing the merger to be completed by the first quarter of 2022.

Afterpay chair Elana Rubin is confident about the Spanish bank’s go-ahead.

“The board considers that while the future growth prospects of a stand-alone Afterpay are strong, we believe that the combination of Afterpay with Block will deliver an unprecedented opportunity for both companies,” she said on Tuesday.

Shares in Afterpay have fallen by nearly 20 per cent in the last month, with the company last trading at $90.70, down 4.2 per cent at 11.20 AEDT.