Insiders at Grindr Inc. (NYSE: GRND) are exploring a deal to take the company private after a steep stock decline created financial pressure on its major shareholders, reported Semafor, citing people familiar with the matter.
Raymond Zage and James Lu, who together control a majority stake in the LGBTQ-focused dating app, are in discussions to secure debt financing from Fortress Investment Group to acquire the company, the people said.
The talks follow a challenging period for Grindr’s top owners.
A unit of Singapore’s Temasek Holdings, which had extended personal loans to at least one of the men backed by their Grindr shares, reportedly seized and sold some of those shares last week after the loans became undercollateralized.
Zage and Lu have discussed a possible buyout price of around $15 per share, valuing Grindr at roughly $3 billion, though the figure could change as talks progress.
The company’s current market capitalization stands at about $2.4 billion, with shares having fallen more than 20% since late September despite strong quarterly performance.
Stock surges on report of take-private talks
Grindr shares surged on Monday following the report by Semafor, rising as much as 15% intraday to $13.83, their biggest single-day gain since June 2024.
At the time of writing, the stock was trading at $13.35, up by 11.62%.
The company, which went public in 2022 via a blank-check merger, has seen its share price slide in recent months despite strong fundamentals.
Grindr’s second-quarter profits rose 25% year over year, signaling solid operational performance even as broader market factors weighed on sentiment.
Corporate filings show that as of June, Zage and Lu collectively owned over 60% of Grindr’s shares, most of which had been pledged as collateral for personal loans.
Those loans were reportedly extended by SeaTown Holdings, a Temasek subsidiary.
Following the recent share seizure, Zage and Lu began exploring options to stabilize their ownership position, leading to the current take-private discussions.
National security considerations loom
Any potential buyout could carry national security implications.
Grindr was previously owned by a Chinese firm, which sold the company in 2020 following scrutiny by the Committee on Foreign Investment in the United States (CFIUS ).
The US government had raised concerns that the platform’s sensitive personal data could be accessed by Beijing and used for blackmail or surveillance purposes.
Zage, a US expatriate who is now a Singaporean national, recently increased his stake to above 50% through stock buybacks.
Lu, a Chinese-born US citizen, holds the remainder of the controlling interest.
Grindr’s future ownership structure may face close review given its history and the data privacy concerns tied to its operations.
The app, which serves millions of LGBTQ users globally, remains a key player in the online dating industry.
As discussions continue, the potential buyout marks a pivotal moment for Grindr.
A take-private deal could provide stability for the company’s ownership and potentially reset its trajectory after a period of share volatility — though it will likely draw the attention of regulators and investors alike.
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