Nubank denies acquisition negotiations with Monzo after press reports

São Paulo | Reuters Nubank stated this Wednesday (30) that it is not seeking a transaction with British fintech Monzo. The statement comes days after press reports stated that Latin America's largest digital bank was negotiating a potential acquisition of the UK company.

"Although we have great respect for Monzo, the company is not seeking a transaction with Monzo," said Nubank in a statement to the market.

Last Saturday (26), a report from the Financial Times stated that Monzo was approached about a possible business combination with Nubank, in an operation that could value the British bank between £8 billion and £10 billion.

The UK company has reportedly hired investment bankers from Morgan Stanley and Qatalyst to advise it, according to Sky News.

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"Nu is highly confident and focused on its strategic priorities: deepening its positioning in Brazil, scaling its business in Mexico and Colombia and building its presence in the United States and around the world through Nu Global," added Nubank in the statement.

The news raised concerns among analysts about the risks of the operation and the possibility that it diverted Nubank's attention from its profitable strategy, which led to a fall on the Stock Exchange this week.

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On Monday (28), the shares closed down 10%, at US$ 12.23, on the New York Stock Exchange. For analysts, the negative reaction reflected a possible change in strategy, moving from a model based on organic growth to an approach more dependent on acquisitions.

During Monday's debacle, the company had stated that it does not comment on rumors or speculation, and cited its "commitment to maintaining transparent, clear and agile communication on any matter relevant to our business".

The bank's new statement this Wednesday calmed market sentiments. After the Brazilian bank's denial, shares rose 7% after the market closed.

In this Wednesday's text, the bank also stated that it regularly evaluates opportunities that are capable of supporting its growth and long-term objectives, including partnerships, investments and acquisitions.

He further added that the basis of its capital allocation is maintained and that investment decisions are based on "strategic framework, expected returns relative to the cost of capital and long-term value creation".

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X-RAY | NUBANK