ThinkSmart to sell Clearpay stake to Afterpay

The Board believes this exchange of ThinkSmart’s interest in Clearpay for the Consideration Shares represents a strong outcome for ThinkSmart shareholders and removes the uncertainty of the independent valuation process which could occur any time, at the election of Afterpay, after the change of control of Afterpay arising from the proposed takeover by Block (formerly Square, Inc) which is expected to occur in Q1 calendar 2022.

In agreeing to these terms, the Board is looking through the current market volatility and is focusing and prioritising on both the volume and the ratio of shares in the exchange. The final ratio of shares agreed is equivalent to that prevailing at the point of the announcement of the Block takeover of Afterpay.
• Based on the Block closing share price on 17 December 2021, and the agreed ratio of 0.375 Block shares for every Afterpay share (and using 1.3239 USD:1 GBP) on implementation of the Scheme, the Consideration Shares equate to a value of £78.1m which, together with the £6.5m of cash and other assets (being £9.5m of net assets at 30 June 2021 less £3m returned to shareholders on 8 December 2021) equates to £84.6m
• This is broadly in line with ThinkSmart’s closing market capitalisation on 17 December 2021 of £86.3m
• Block share price on 17 December closed 30% below its average since 2 August 2021 but despite this recent reduction in the value of Block shares the Directors believe there is significant potential for future value accretion

Ned Montarello, Executive Chairman of ThinkSmart, said “We believe this outcome provides our shareholders with an opportunity to continue the exciting Afterpay journey now directly with Block and we as a Board see continued long term value accretion with this outcome.”

The Disposal will be put to a vote of ThinkSmart shareholders at a meeting on 14 January 2022 and is unanimously supported by the Board.

The Directors consider the Disposal to be in the best interests of the Company and ThinkSmart shareholders as a whole and unanimously recommend that shareholders vote in favour of the Disposal, as they intend to do in respect of their own beneficial holdings amounting to, in aggregate, 44,022,458 Ordinary Shares representing approximately 41.30% of the Company’s issued share capital.

The Disposal is conditional upon ThinkSmart shareholder approval being obtained at the General Meeting which is to be held virtually by videoconference at 4.30pm (AWST) and 8.30am (GMT) on Friday 14 January 2022.