Shift4 Payments' Global Blue Deal: A Strategic Win with Regulatory Green Lights Ahead

Shift4 Payments (NYSE: FOUR) stands on the precipice of a transformative acquisition as its tender offer for Global Blue Group Holding AG (NYSE: GB) nears its Q3 2025 closure. With 96.66% of Global Blue shares tendered—far exceeding the 90% threshold—and Moody’s recent credit rating upgrade, the deal’s success is all but assured. While regulatory approvals remain pending, the strategic synergy between the two companies, robust financials, and shareholder enthusiasm position FOUR as a compelling "Buy" ahead of the merger’s completion. Here’s why investors should act now.

The 96.66% Tender: A Vote of Confidence

The overwhelming shareholder acceptance of Shift4’s $7.50-per-share offer underscores the market’s belief in the deal’s value. With Global Blue’s tax-free shopping and cross-border commerce expertise merging with Shift4’s payment processing platform, the combined entity gains a $1.2B+ revenue runway in high-growth markets. This level of tender participation also eliminates the risk of a failed transaction, a critical point for investors wary of stranded deal costs.

Moody’s Upgrade: Validation of Financial Strength

On April 30, 2025, Moody’s raised Shift4’s corporate family rating to Ba3 from B1, citing improved financial prospects post-acquisition. The upgrade reflects confidence in Shift4’s ability to de-leverage swiftly, with debt-to-EBITDA expected to drop to below 4x by 2026, from ~5x in 2025. This reduction is fueled by:
- Global Blue’s full-year EBITDA contribution ($150M+ annually).
- Margin expansion in Shift4’s core operations (targeting a 20% EBITDA margin).
- Strong liquidity: $575M in cash and a $550M undrawn revolver.

The stable outlook further signals Moody’s belief in Shift4’s capacity to sustain low-teens revenue growth and maintain a mid-3x debt-to-EBITDA ratio post-merger. This rating improvement not only lowers borrowing costs but also opens access to cheaper capital markets—a critical edge in a tightening credit environment.

Regulatory Risks: Manageable and Overblown

While the deal requires regulatory approvals in “certain jurisdictions,” the timeline and conditions suggest limited downside risk:
1. Swiss Tax Ruling: The critical Required SFTA Tax Ruling has likely been secured, given the extended tender deadline (now June 5) focused on finalizing terms, not delays.
2. Antitrust Scrutiny: Shift4 and Global Blue operate in complementary markets, reducing overlap concerns. Regulatory hurdles are more procedural than substantive.
3. Timeline Certainty: The Q3 2025 close date remains intact, with Shift4’s legal team (Latham & Watkins LLP) actively managing the process.

Even if approvals take longer, the extended tender period and 96.66% acceptance ensure the deal proceeds via a squeeze-out merger, barring unforeseen litigation.

Why Buy FOUR Now?

1. Post-Merger Growth Catalyst: Global Blue’s 200+ duty-free locations and partnerships with luxury brands (e.g., LVMH, DFS) will drive cross-selling opportunities in Shift4’s merchant ecosystem.
2. Debt-Friendly Financing: The Ba1-rated senior secured facilities ($680M in notes, $550M revolver) provide ample liquidity without over-leveraging.
3. Free Cash Flow Machine: Moody’s forecasts $600M+ annual FCF post-merger, enabling share buybacks or dividends once debt ratios normalize.

DA Davidson’s $124 price target (vs. current ~$95) assumes a 20x P/E multiple on 2026 earnings—a conservative valuation given the synergies.

Conclusion: Act Before the Merger Closes

Shift4’s acquisition of Global Blue is a strategic masterstroke with minimal execution risk. The high tender acceptance, Moody’s upgraded credit rating, and manageable regulatory path all but guarantee the deal’s success. With shares trading at a ~30% discount to their post-merger potential, FOUR is a must-buy for investors seeking high-growth, undervalued opportunities in fintech.

Recommendation: Buy FOUR at current levels, targeting a $120+ price by Q4 2025 as synergies materialize.

Risk Note: Regulatory delays or margin contraction could pressure the stock. Monitor Q3 2025 merger completion and FCF trends closely.