Ann: Shareholders to vote on Humm Consumer Finance transaction, page-95

Some further thoughts overnight.

Humm’s BNPL business appears to include its US business which if you read the press and other announcements BNPL businesses in the USA are being investigated and a review of the business type is underway.

The Managing Director and CEO of Latitude is Ahmed Fahour, who is also a significant shareholder in Latitude. Fahour was a founding shareholder in Latitude prior to its IPO on the ASX and 2021.Fahour was born in Lebanon and was a Partner of Boston Consulting Group in the US where he also worked for Citigroup (CEO of Citigroup Alternative Investments) before transferring to Australia where he became CEO of National Australia Bank. Fahour subsequently becoming Australia’s highest paid public servant while the Managing Director of the government owned Australia Post, where he earned a $4.4 million salary and a $1.2 million bonus.

Abercrombie has engaged ABL to assist him with his challenge (as reported) but Fahour also has a client relationship with ABL. The press has historically referred to one of the city of Melbourne’s most expensive residential properties, Invergowrie in the suburb of Hawthorn, as being owned by Fahour. In February 2020 the press stated the following about this property:

Another historic, landmark estate Invergowrie, also in Hawthorn and said to worth more than $45m,remains in the name of an Arnold Bloch Leibler-administered nominee company.

Other press articles state that ABL acted for Fahour when he purchased this property for $22 million in 2013. ABL are not known for their residential property legal work, but they are known for their nominee companies that can potentially hide beneficial ownership of shares and trusts.

It appears we have Abercrombie (HUM) and Fahour (Latitude) both clients of ABL

The press reported ABL advised private equity firm Värde Partners on the $83 billion acquisition of US domiciled GE’s consumer finance business in Australia and New Zealand Värde Partners inconsortium with KKR and Deutsche Bank.This business was renamed Latitude Financial Services – the same company acquiring Humm’s BNPLbusiness.

BNPL business valuations are going south making this deal in my mind an excellent one for HUM shareholders as Latitude it could argued are paying more for the business than it is potentially worth.

The next issue is what is left in this HUM business? I think not much other than some commercial leasing arrangements. The review above which I agree with on the performance of the company with Abercrombie involved shows he has really destroyed a lot of shareholder value.

So why is Abercrombie so desperate to stop the deal going through?