Wirecard shares jump as purchase talk swirls
Wirecard shares more than doubled after the embattled payments company said its business activities were continuing to operate and speculation arose that rivals might snap up some of its operations.
The German payments company said on Saturday that its business operations were "ongoing" and that it was reviewing whether insolvency applications would have to be filed for subsidiaries.
The parent company performs some central functions for subsidiaries and, apart from a small development branch office, no group companies have filed for insolvency yet, it said.
"With the filing of the insolvency application, Wirecard's business activities will be continued," the company said. "The management board is of the opinion that continuation is in the best interests of the creditors."
Wirecard shares rose as high as €3.85 on Monday and were up 109% to €2.68 at 10:17 BST. Traders said the rise was driven by market talk about potential deal activity.
"Wirecard shares have soared today on chatter that Worldline, the French payments group, might seek to buy parts of the struggling company," David Madden, market analyst at CMC Markets, said.
The company's Munich-based bank is not part of insolvency proceedings and its electronic funds transfers are not affected, Wirecard said. Wirecard also said it hoped its UK business, suspended by the Financial Conduct Authority on Friday, would continue trading after talks with the regulator.
The FCA told Wirecard to stop carrying out regulated activities in the UK, leaving thousands of UK customers with frozen accounts. The regulator said on Monday it worked with Wirecard and other authorities over the weekend and had seen good progress from the business in meeting requirements.
"We are maintaining pressure on the firm to resolve these issues which would allow it to operate under certain conditions," the FCA said. "However, we cannot lift the restrictions without reassuring ourselves that the firm has been able to satisfy all our concerns for example that all clients' money is safe.
Wirecard filed for insolvency after its auditor, Ernst & Young, reported €1.9bn, about a quarter of its balance sheet, missing from the company's bank accounts. Wirecard's new chief executive, James Freis, has told supervisory board members that basic checks should have spotted the scandal, the Financial Times reported.
Markus Braun, who drove the company's rapid growth, resigned after the missing money was declared and was arrested and bailed in Germany. He denies wrongdoing.