Wirecard wins $ 1 billion investment from Japan's Softbank

BERLIN (Reuters) – The Japanese group Softbank Group Corp will buy a 5.6% stake in Wirecard for around 900 million euros, the company said Wednesday, joining forces in the digital payments industry.

Wirecard shares jumped 10% at the top of the German prime index, as analysts welcomed the investment as a vote of confidence in the activity that will allow the Munich-based company to expand its business in Asia.

Under this agreement, Wirecard will issue bonds exclusively to a subsidiary of Softbank, which will convert to 6.92 million Wirecard shares after five years, which currently represents approximately 5.6% of the company.

The conversion price of 130 euros per share represents a premium of 5% over Wirecard's closing price on Tuesday. Shareholders will vote on the bond issue at its June 18 annual meeting.

Wirecard, founded in 1999, dismissed last year the Commerzbank lender from the German prime DAX index, taking advantage of the accelerating global trend in favor of electronic payments based on e-commerce .

But equities have lost about 38% since early September, affected by the negative sentiment towards technology stocks and information published in the Financial Times, saying the staff of its Asian operations had inflated reported earnings.

Last month, Wirecard announced that an outside law firm in charge of the investigation had discovered that local staff at its Singapore office may have committed crimes, but that These were not important for the financial situation of the German payment company.

ASIAN EXPANSION

Wirecard and Softbank said they have also signed a strategic partnership to collaborate on digital payments.

In this context, Softbank will help Wirecard grow in Japan and South Korea and provide opportunities for collaboration with other companies in its portfolio in areas such as data analytics / AI and innovative digital financial services.

"Through this potential partnership, we will expand our reach and products to East Asian markets, strengthening our position in Asia," said Wirecard CEO Markus Braun.

Baader Helvea analysts said the investment was a "clear benefit" that will allow Wirecard to leverage its product portfolio in Japan and South Korea, which could even accelerate strong organic growth.

Credit Suisse acted as financial advisor to SoftBank and Sullivan & Cromwell LLP as legal counsel. Noerr LLP and Gibson, Dunn & Crutcher LLP act as counsel to Wirecard.