Shares of Repay Holdings Corporation (NASDAQ:RPAY) jumped 22.1% on Monday after Forager Capital Management increased its acquisition proposal to $5.25 in cash per share. The revised offer was presented to Repay’s board on June 26 and followed an earlier bid by the Birmingham, Alabama-based investor.
Forager, which holds approximately 13% of Repay’s outstanding common shares and is identified as the company’s largest shareholder, framed the higher price as a reflection of its "continued conviction in the value of Repay." In a letter to the board, the firm said the boost in the proposed purchase price was a constructive response after an in-person meeting with Repay’s chairman.
The updated $5.25 proposal represents a 91% premium to Repay’s 30-day volume-weighted average price of $2.75, measured at the time of Forager’s original approach. Forager said the offer would involve acquiring 100% of Repay’s outstanding common stock through a negotiated merger agreement.
According to the proposal, Forager has access to sufficient financing to complete the transaction and the bid is not conditioned on financing. The firm noted, however, that the offer is subject to customary conditions, including necessary regulatory approvals and the execution of a definitive merger agreement.
Forager also stated that its proposal is based solely on publicly available information to date, while expressing confidence that additional value could be identified through customary management access and confirmatory due diligence. To facilitate that process, the investor said it is prepared to enter into a standard confidentiality agreement.
In its letter, Forager argued Repay could be better positioned to pursue its strategic objectives as a private company, citing the removal of public company costs and obligations as a rationale for the transaction. The investor pointed to its recent purchase of Quipt Home Medical - an acquisition it said was executed for approximately $260 million - as evidence of its ability to complete deals in a timely manner.
Forager has retained White & Case LLP as legal counsel in connection with the proposal. The submission of the revised offer sets in motion a process that will require the company and its board to evaluate the terms and for any transaction to clear the stated conditions before completion.
Sectors impacted: The immediate effects are concentrated in public equity markets and the merger and acquisition sphere, particularly among investor-activist and strategic buyers engaging in negotiated takeovers.