Patience needed at OFX

OFX shareholders should reject a low-ball takeover and first restore the company to profitability so they can wait for a better bid.

• Forager owns 6.92% of OFX, accumulated over 16 months at prices between $0.51 and $0.91, while the share price has fallen below $0.40 after Equals terminated its transaction deed on 26 October 2026.
• Forager considers industry consolidation and a sale preferable to OFX remaining listed, and regards Equals’ previous $1.00-per-share offer as appropriate compensation, implying an equity value of $233m.
• OFX generated almost $200m of annual net operating income, comparable to Equals’ annualised gross margin of about £98m after Alakazam’s acquisitions, but OFX’s half-year run rate was a pre-tax loss of $5m-$10m.
• Forager estimates that a combined business could remove about $50m or more of OFX’s $200m cost base, potentially producing roughly $40m of annual pre-tax profit on a $200m purchase price net of cash.
• OFX has experienced falling net operating income, materially higher costs and a shrinking cash balance, although its latest quarterly update showed a second consecutive quarter of modest sequential growth and implemented $15m of operating-expense reductions.
• Forager says cost reductions should be doubled and that OFX should target $15m-$20m of pre-tax profit, with dividends or buybacks, to create a credible standalone alternative to selling.

Takeaway: A takeover remains Forager’s most likely medium-term outcome, but shareholders need an immediately viable standalone business to avoid being forced to accept a low offer, especially if Equals or another bidder exploits OFX’s weakening position.