MoneyHero’s $8m gambit: bold move or blunder?

For years, personal finance platform MoneyHero Group and rival MoneySmart operated in the same markets, even as other competitors came and went.

Then, last month, Nasdaq-listed MoneyHero made a controversial US$8 million non-binding offer to wholly purchase Singapore-headquartered MoneySmart.

Aside from being perceived as a lowball offer – given MoneySmart’s financial performance in 2023 – the way it was presented also raised a few eyebrows.

Millions of users visit MoneyHero and MoneySmart each year to find deals on credit cards, insurance products, and personal loans. The two firms work with the same banks and insurance companies, whose products they peddle.

They also butt heads in Singapore and Hong Kong, MoneyHero’s two largest markets where it operates the SingSaver and MoneyHero brands, respectively.

Highly unusual

MoneyHero’s approach was highly unusual as far as M&A strategies go, says Joel Shen, partner at law firm Withersworldwide.

Shen, who has advised companies on M&As of tech businesses and assets, tells Tech in Asia that the M&A process for a privately held company typically begins with a prospective buyer canvassing support from its key shareholders.

It doesn’t achieve anything from a legal or deal-making perspective.

The process would also involve bringing shareholders of the target company around the table together with its board of directors. Such conversations would also involve discussions on what a reasonable price would be.

Forcing an answer from the target company through a public press release, in the manner MoneyHero did, is not only “very unusual” but risks angering the party, Shen adds. It also “doesn’t achieve anything from a legal or deal-making perspective.”

The fact that MoneyHero announced that it had made an offer to buy MoneySmart shares through a press release “suggests to me that no term sheet exists” or that it has expired, Shen notes. Had one been on the table, a public announcement would have been a breach of confidentiality provisions, he adds.

To MoneySmart’s knowledge, the offer had not been presented to any of its shareholders prior to MoneyHero’s public statement, Vinod Nair, MoneySmart founder and CEO, tells Tech in Asia in an emailed response.

While MoneyHero has “repeatedly approached some of our shareholders and board members with vague proposals, these have lacked substance, clarity, or any viable path forward that aligns with MoneySmart’s strategic priorities,” Nair says.

Ruffled feathers

A “bold” strategy

Combining strengths