SoftBank has hired financial advisers and is working on a deal to acquire bonds that can be converted into Wirecard shares.
Wednesday 24, April 2019
(Bloomberg) --SoftBank Group is considering an investment in Wirecard that could give the Japanese conglomerate a five per cent stake in the beleaguered German internet payment firm.
A representative for Tokyo-based SoftBank declined to comment. A spokeswoman for Munich-based Wirecard did not respond to emails and phone calls requesting comment after business hours. No decision has been made and the plans could still change, the people said.
A cash injection by SoftBank could help shore up investor confidence at Wirecard after a series of reports since January that alleged accounting wrongdoing at the company’s Singapore operations.
Wirecard has seen its market capitalisation, which topped Deutsche Bank earlier this year, cut by about a quarter to EUR 15.3 billion ($17 billion).
Additionally, Wirecard has repeatedly denied wrongdoing and said an internal investigation cleared it of material faults. It said on 5 April that an accounting executive who has been at the centre of fraud allegations at the Singapore business has left the company.
The German financial regulator BaFin had banned short trading for two months until it lifted the ban last week.
An agreement with SoftBank would follow weeks of discussions by the companies’ top management and SoftBank is expected to buy more Wirecard shares on the market at a later stage.
The firm operates as one of several payment providers for ride-hailing service Uber Technologies, in which SoftBank’s technology-focused Vision Fund owns a 15 per cent stake. Closer ties with its new investor could help Wirecard win more business from Uber and other portfolio companies under the Vision Fund. It could also provide services to Alibaba Group Holding, in which SoftBank owns a stake.
SoftBank has reshaped the start-up landscape with the Vision Fund, which is in talks with investors to add as much as $15 billion more to its current $100 billion value. Over about two years, the Vision Fund has invested more than $70 billion in tech companies.
The payment sector has yet to see the emergence of a clear global leader. PayPal Holdings, Ant Financial as well as Tencent Holdings and Paytm have all become major players, albeit in limited geographies, while Apple and Samsung Electronics have not gained significant market share.