Shares in Cash Converters International Limited (ASX:CCV) sunk up to 40 per cent at open, one day after the company announced US-based EZCORP Inc (NASDAQ:EZPW) has terminated its proposal to acquire an additional stake in the second-hand goods and financial services franchise.
Earlier this year payday lender EZCORP announced it would purchase a controlling 53 per cent interest in Cash Convertors for $0.91 per share.
However EZCORP has now abandoned the deal, blaming its decision on the federal government’s proposed move to limit small credit contract fees.
EZCORP continues to be a 33 per cent shareholder in Cash Converters with the master franchise rights for the Cash Converters business in Canada.
Shares in Cash Converters were 20 per cent down this morning, trading at $0.40.
In the six months to 31 December 2010, Cash Converters International reported a net profit of $14.3 million.
