Shares of Grindr surged on October 24 after the dating-app company’s majority shareholders, George Raymond Zage III and James Lu, submitted a non-binding offer to acquire all outstanding shares at US $18 per share – representing a roughly 51% premium over the stock price of October 10. The proposal values the company at approximately $3.46 billion.
The offer comes as Zage and Lu control over 60 % of Grindr’s outstanding shares. The two have reportedly secured conditional financing, including equity from institutional investors, to support the buyout. One analyst firm told Reuters that the proposal is “the most likely to cross the finish line.” Grindr listed on the New York Stock Exchange in November 2022, after being acquired in 2020 for about US $608 million. Despite the early surge following the IPO, the company has faced headwinds in recent years, including competition from niche and AI-driven dating apps and declining user growth.
The proposed deal would give Zage and Lu much greater control of the platform, presumably with the goal of pushing the platform back to its previous level of success. Grindr’s existing net loss climbed to $131 million last year, and Lu and Zage have gone on record as “strong believers in the long-term outlook for the company” – implying that the pair, who already own nearly 65% of Grindr as it stands, have ideas for how to undo the current slump the app is stuck in.
The firm’s board has responded by forming a special committee of independent directors to evaluate the offer, its financing commitments, and alternative proposals. Until a definitive agreement is reached, the process remains exploratory.
