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New York-listed shares of Grindr jumped the most in three years after billionaire George Raymond Zage III and James Lu, the company’s majority owners, offered to buyout the minority shareholders in a deal valuing the LGBTQ dating app at $3.5 billion.
Grindr shares climbed 18.9% to $15.06 at the close of trading in New York. Zage and Lu offered to buy the rest of the company at $18 a share, a 51% premium to the stock’s price on Oct. 10 before the majority shareholders disclosed plans to take the company private, according to a statement on Friday. The offer is also 20% above the minimum price of $15 that the duo had planned to make.
“We are strong believers in the long-term outlook for the company,” Zage said. “I have been a consistent buyer of shares in Grindr since listing, buying over $200m of shares on the public market and am also willing to contribute additional equity to this deal.”
Zage—successfully oversaw the Asian division of U.S. hedge fund Farallon Capital Management before setting up Singapore-based Tiga Investments in 2017—said equity and debt investors have expressed interest to participate in this deal. The majority shareholders disclosed last week that they have raised $1 billion in preliminary and conditional debt financing.
“We are pleased to submit this proposal, which represents a significant premium to recent trading prices and better positions the company for focused growth as a private entity,” said Lu, chairman of Grindr. “We look forward to engaging constructively with the company and other shareholders in executing on our proposal.”
Zage and Lu—who own a combined 64% of Grindr—are making an offer as the company’s shares tumbled this year despite an earnings improvement with its net profit rising 25% to $17 million in the second quarter from a year ago. Last year, Grindr saw its net loss widen to $131 million due to a non-cash loss related to its warrant liability on $345 million in sales, which jumped by a third. It completed the redemption of all public and private warrants earlier in February.
In 2020, Zage joined Lu, cofounder of U.S. buyout firm Joffre Capital, and American serial entrepreneur J. Michael Gearon Jr. to set up San Vicente Acquisition to buy Grindr for about $608 million, with Zage’s privately held Tiga owning 54% of the joint venture.
The partners then merged Grindr with Zage’s blank check company Tiga Acquisition in a transaction valued at $2.1 billion, to take it public two years later on the New York Stock Exchange. The stock surged over 200% when it listed in November 2022, landing Zage in the three-comma club (after accounting for pledged shares.) While shares have corrected by almost 60% since the frothy listing, it’s earned him a spot among Singapore’s 50 richest and still accounts for the bulk of his $1.5 billion fortune today based on Forbes’ real-time data.
Launched in 2009 as one of the first location-based dating apps for gay men, Grindr has since become the most popular LGBTQ mobile app worldwide, claiming over 14 million monthly active users.