Grindr stock faces $18 per share buyout offer from prior acquirers

Investing.com - Grindr (NYSE:GRND), currently trading at $15.06, received an $18.00 per share buyout offer from former acquirers James Lu and Raymond Zage, according to Citizens analyst research released Monday. According to InvestingPro data, the company has demonstrated strong revenue growth of 28.35% over the last twelve months.

The non-binding offer values the company at approximately $3.7 billion and would take the LGBTQ+ dating app private. The proposed transaction structure includes $1 billion in debt financing and $100 million in new equity, with Lu and Zage planning to roll over their existing ownership of approximately 118.6 million shares. InvestingPro analysis shows the company operates with a moderate debt level, with a debt-to-equity ratio of 1.53 and maintains healthy liquidity with a current ratio of 2.48.

Citizens maintained its Market Outperform rating and $23.00 price target on Grindr stock, noting the offer values the company at 16.2x estimated 2026 EBITDA and 13.5x projected 2027 EBITDA.

The research firm identified a potential $575 million funding gap in the proposal, suggesting Lu and Zage would need to convince additional equity holders to roll over their stakes to complete the transaction.

Citizens expressed concerns about the security of the proposed funding while acknowledging the bidders’ "track record of personal success," and noted recent reports that some shares used as loan collateral were subject to margin calls and subsequently sold.

In other recent news, Grindr Inc. has confirmed receiving an unsolicited take-private proposal from major shareholders Ray Zage and James Lu. The offer values the company at $18.00 per share in cash, representing a 51% premium over the company’s stock price on October 10. Zage and Lu, along with their affiliated entities, currently own more than 60% of Grindr’s outstanding common stock. The proposal was submitted through a Schedule 13D filing and indicates a move to acquire all remaining shares they do not already own. This development follows a letter from the shareholders expressing interest in taking the company private. The proposal has been described as non-binding, signaling the initial stages of negotiation. Grindr’s Board of Directors is currently evaluating the proposal, which could significantly impact the company’s future.

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