Speculation is intensifying in the Australian payments industry that an offshore financial institution is preparing to mount a buy-out of ASX-listed buy now pay later player, Zip Co.
Two senior market sources alerted Banking Day to the conjecture on Friday, saying they had been told that Zip’s board could receive a formal offer from a foreign player in the next week.
The speculation surfaced after Zip on Wednesday deferred the release of its December half profit result without giving any reasons to investors.
The company now is scheduled to unveil its interim accounts this morning.
While neither of the industry sources could name Zip’s offshore bidder, both said US bank Goldman Sachs was the most likely candidate given its recent unsuccessful attempts to establish a beachhead in the North American BNPL market.
Zip has a presence in the US market through its 2020 acquisition of the QuadPay BNPL platform.
Since 2020 Goldman Sachs, which is mostly known as an investment bank, has been trying to deepen its presence in the US consumer finance market.
The push into retail finance is part of an effort to rebalance the bank’s business mix.
Goldmans launched a point of sale financing service known as MarcusPay in April 2020, but the business appears to have encountered difficulty winning support from US merchants.
MarcusPay allows customers to buy goods or services worth up to $10,000 and repay in instalments.
Bloomberg reported in July last year that Goldmans was partnering with Apple to build a global BNPL platform attached to the ApplePay service, but recent media reports indicate that development of the joint venture has stalled.
If Goldmans decides to acquire a BNPL capability it has several potential listed targets with a presence in the US market.
They include the NASDAQ-listed Affirm BNPL business, which has seen its market capitalization plummet more than 70 per cent in the last six months to around $US 11 billion.
In a February 14 article published in the Fintech Business Weekly newsletter, former Goldman’s executive Jason Mikula suggested that the bank’s interest might be better served acquiring ASX-listed Zip Co.
Zip’s market cap has fallen more than 80 per cent in the last year to A$1.3 billion.
That equates to around US$940 million – a big discount to Affirm’s market valuation.