(Reuters) -Grindr’s two largest shareholders said on Wednesday that they had withdrawn their proposed $3.46 billion offer to take the dating app private, shortly after the company ended talks over financing concerns.
Ray Zage and James Lu, who together own more than 60% of Grindr’s outstanding shares, had offered $18 per share last month, representing a 51% premium over the company’s stock price at the time.
However, Grindr’s special committee ended negotiations earlier this week, citing that they were “unable to obtain satisfactory information about definitive financing.”
The two shareholders said they had received strong interest from lenders and investors to support the transaction but did not disclose their names.
Following the withdrawal, Zage said he intended to buy additional Grindr shares and urge the board to expand stock buyback and consider dividends.
The investors expressed confidence in Grindr’s ongoing strategy and highlighted the company’s third-quarter results, which keep it on track for full-year revenue growth of about 26%.
The company’s shares have fallen 29% this year, as the dating industry struggles with slowing user growth and rising “swiping fatigue”, although they have still performed better than those of rivals Match Group and Bumble.
The app, which has millions of users across more than 190 countries, focuses on same-sex relationships and is the first dating platform to integrate sexual health tools.
Zage and Lu acquired Grindr in 2020 from Chinese gaming firm Kunlun Tech, after U.S. regulators raised national security concerns over data privacy. They later took the company public via a SPAC merger in late 2022.
(Reporting by Kritika Lamba in Bengaluru; Editing by Tasim Zahid and Anil D’Silva)
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