Klarna, the buy now, pay later (BNPL) financial giant, has withdrawn the right of large shareholders to block share trades from smaller investors ahead of a potential $20bn (£15.7bn) float in the US.
Sky News has learned that the Stockholm-based company, which has around 150 million customers, notified investors last week that it had taken control of share transaction approvals and eliminated special rights held by a small number of its principals. shareholders.
In a memo to investors, Klarna said it “listened to…shareholders”.
“Many of you have raised concerns about the slow approval process for secondary transfers, but even more so the lack of certainty as to whether the buyer will be able to complete the transaction.”
“Large shareholders”, he stated, “no longer have the right to interfere in the process”.
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Preferential purchasing rights held by Klarna’s founders have been a source of growing tension ahead of a potential blockbuster float in New Yorkwhich sources say is now likely to occur in the first quarter of 2025.
Klarna has established a new UK-registered holding company as part of its journey towards public listing, with the elimination of the shareholder veto occurring simultaneously.
Investment banks have not yet been named to a float, and people close to the company said they anticipate they will be selected within the next three months.
The company, which employs around 5,000 people, has been the subject of intense flotation speculation for months.
Its founder and chief executive, Sebastian Siemiatkowski, said in January that this was expected to happen “very soon”.
The decision to establish a holding company in Britain reflected the UK’s position from a legal, regulatory and capital markets perspective, sources said last year.
However, its listing in the US will be a disappointment to the London Stock Exchange, which has been pushing for Klarna to be listed in the UK.
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Klarna was forced to reduce its valuation to $6.7 billion (£5.3 billion) in a 2022 funding round, having been valued at $46 billion (£36.6 billion) and receiving support from investors including Vision Fund from SoftBank, Sequoia Capital and Mubadala. the Abu Dhabi sovereign wealth fund.
Bankers believe that, based on a comparison with New York-listed Affirm Holdings, Klarna should attract an IPO valuation of between $15 billion and $20 billion.
Klarna’s corporate reorganization comes after the UK government appeared to back away from its crackdown on the BNPL sector.
Sky News revealed last July that ministers were planning to shelve new legislation to regulate providers such as Klarna, with future rules incorporated into a reformed Consumer Credit Act.
Consumer campaign groups responded with fury to the decision, which has not yet been announced by the government.
Last autumn, the Financial Conduct Authority said it had secured contract changes for BNPL customers following an explosion in the use of such products.
A survey published by the city’s watchdog showed that 27% of adults – around 14 million people – used BNPL at least once in the second half of 2023.
Klarna has already declared itself in favor of “proportional” regulation of the sector.
The company is expected to release quarterly results on Thursday, demonstrating further progress on the path to sustained profitability.
This story originally appeared on News.sky.com read the full story
