Speculation has resurfaced that buy-now-pay-later provider Zip could be approached for a takeover, as the company has staged a $60m turnaround after it was losing $30m last year.
According to a report by The Australian, a Zip spokesman has relayed that the company has not received any takeover approaches, but several market sources have indicated that at least one group may be interested in the BNPL provider.
It is speculated that likely buyers could be larger offshore competitors like Klarna, and some of the Australian banks.
Westpac previously held a major stake in Zip, and it is rumoured that Westpac boss Peter King is keen to embark on acquisitions.
The company has about $1bn in annual revenue, six million customers and a large cost base, and is now making $30m after increasing margins, slashing costs by 20 per cent and staging an exit from over five markets such as the United Kingdom, Middle East and South Africa
Zip’s share price has more than doubled in the past six months to 79c and its market value at $785m.
The collapse of smaller competitors and exit from the market by groups like Apple, Goldman Sachs and PayPal is helping Zip.
In the coming weeks Zip it is expected to report some good news on its margins.
Former Barclays banker Cynthia Scott is CEO of Zip, which is chaired by Australian business professional Diane Smith-Gander.
