Humm Group is reportedly considering breaking up the company and selling its commercial division following the collapse of a proposed acquisition by Credit Corp. The deal, which fell through this week, had initially offered shareholders 77 cents per share through a scheme of arrangement or 72 cents per share via an off-market takeover bid, valuing the debt collection and finance company at approximately $385 million.
The acquisition attempt was marred by a series of complications involving Humm’s founder Andrew Abercrombie, activist investor James Raper, and the Takeovers Panel during the due diligence process. After these issues surfaced, Credit Corp, advised by Macquarie, substantially lowered its offer to around 60 cents per share, conditioned solely on a scheme with full board recommendation. Humm’s independent board committee rejected this revised proposal as unacceptable.
At the initial offer stage late last year, Abercrombie, who retains a controlling 29.6 percent stake in Humm, dismissed the proposal as “not compelling.” In the wake of the deal’s collapse, Humm shares plunged 22 percent to 46 cents on Monday. Industry sources suggest that a potential breakup and subsequent sale of the commercial division is being considered as a strategic move to maximize shareholder value and reposition the company after prolonged governance challenges.
The commercial division, operating under the name Flexicommercial, serves as Humm’s main profit center, specializing in financing agriculture and manufacturing businesses as a non-bank lender. While no official decision has been announced, longstanding advisers like Highbury are reportedly involved in discussions about the company’s future structure.
It remains uncertain which parties might pursue the commercial division if a sale proceeds, although Credit Corp is believed to have a continued interest given its prior engagement with Humm. Both Humm and Credit Corp have declined to comment on the prospective breakup and acquisition speculation.
The company’s recent history has been tumultuous. Initially, The Abercrombie Group, through which Andrew Abercrombie holds his Humm stake, made an offer for the business that was later withdrawn. Abercrombie then privately rejected Credit Corp’s approach weeks before the board publicly stated it was “carefully evaluating” the bid. Following the announcement, Abercrombie increased his shareholding, prompting the Takeovers Panel to rule his actions unacceptable and suspend voting rights on 115 million shares purchased post-offer disclosure.
In February, Abercrombie stepped down as chairman to mitigate perceived conflicts of interest but subsequently initiated High Court proceedings in May challenging the panel’s authority. This legal action came after an emergency general meeting called by activist Jeremy Raper and Sandhurst Trustees led to the removal of replacement chair Robert Hines.
As the situation develops, Humm Group faces critical decisions about its corporate structure and strategy amid ongoing investor scrutiny and intensified governance reforms.