Lloyds Bank’s £125 million acquisition of Curve is facing legal challenges from the London-based fintech’s largest investor.
Lloyds recently moved to finalize the deal for Curve, which offers a digital wallet that consolidates various cards and payment options into a secure platform, featuring money-saving and loyalty benefits. The acquisition price amounts to only about half of the total funding that Curve has accumulated over the past decade, far from the $50-$60 billion valuation anticipated during the fintech boom.
IDC Ventures, Curve’s largest external investor with a 12% stake, has filed a petition in the High Court to contest the agreement. The petition claims “serious failures” by key directors and investors, including Curve’s CEO Shachar Bialick and chairman Lord Stanley Fink.
According to IDC, these failings have “undermined shareholder rights, concealed material information, and allowed another major shareholder, Hanaco, to gain disproportionate rights and voting control at the expense of other investors.” The petition also alleges intentional concealment of important information by certain parties, along with breaches of contract and directors’ duties, which led to financial distress that facilitated a restructuring of voting rights favoring Hanaco and its aligned directors, to the detriment of other investors.
IDC expresses concern over Lloyds’ decision to proceed with the deal despite its objections, stating that the actions of Hanaco and the failures of key directors have caused significant financial damage, wiping out hundreds of millions in value and leaving Lloyds as the only bidder at a much-lowered price. IDC estimates that over £670 million of shareholder value has been lost as a direct result of these events.
Neither Curve nor Lloyds has commented on the legal challenge.