A recent statement from Ripple CEO Brad Garlinghouse added some credibility to previous reports that the company might acquire its rival Circle.
During a chat at the XRP Las Vegas event, panelists asked Garlinghouse about speculation regarding the potential acquisition of Circle. With a bit of humor, he noted that he couldn’t “announce” any intended acquisition ahead of time.
Rejection of the $20 billion offer, but not an acquisition
Addressing rumors about a $20 billion offer made by Ripple to acquire Circle, Garlinghouse clarified that while there was an “arguably” $20 billion offer involved, it wasn’t exactly what people thought. His comments seemed to hint that discussions could be ongoing, but he dismissed the inflated figures circulating within the XRP community.
Essentially, if there’s no offer on the table, it appears that Garlinghouse is suggesting Ripple isn’t even trying to secure Circle. His focus was more on countering the exaggerated claims rather than offering a full denial of negotiations.
Previous reports indicated that Ripple initially made an offer of around $5 billion, but Circle found that too low and opted to pursue an IPO instead.
Circle is looking to raise around $6 billion from its public offering, which is, interestingly, a little higher than Ripple’s first proposal.
After that, there were unverified claims suggesting Ripple upped its bid to $10 billion. Some commentators propose that, given this new offer, Circle might reconsider its IPO plans.
On the flip side, others suggest that the decision around the IPO might depend on Circle’s long-term objectives. Sometimes, broader strategic goals outweigh immediate financial considerations.
Ripple of a wider target
Garlinghouse’s remarks seemed to cool speculation that Ripple has raised its offer. Yet, his lack of a clear denial encourages ongoing chatter around potential talks regarding Circle.
This aligns with Ripple’s broader strategy of aggressive acquisitions aimed at bolstering its position in the financial services sector. As firms pursue mergers and acquisitions, they are sidestepping their own IPO initiatives.
Ripple has already acquired several companies, including its most significant one, Metaco, as well as Standard Custody and, more recently, Hidden Road. Circle could be next in line.
A spokesperson for Circle reportedly stated that the company is not for sale, but this denial’s credibility is undermined since it didn’t come through an official channel and the spokesperson remained unnamed.
Circle IPO Update
Meanwhile, Circle’s upcoming IPO has seen overwhelming interest, with subscriptions exceeding 25 times the expected amount, potentially complicating Ripple’s acquisition ambitions. Initially, Circle aimed to raise $624 million by offering 24 million shares priced between $24 and $26.
Due to significant demand, Circle has now expanded its offering to 32 million shares and is expecting a valuation of around $7.2 billion.
It seems major investors like Ark Invest and BlackRock are getting involved. The IPO is set to launch on June 5th at the NYSE under the ticker “CRCL.” The strong oversubscriptions suggest that Circle might be undervalued at present and could perform well in the market.
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