TAL Daiichi Life Australia, a subsidiary of Japan's Daiichi Life Group, has lodged a conditional, non-binding indicative proposal with Challenger's board to buy the shares of the Australian investment manager it does not already hold, Reuters reported. The offer values Challenger at A$7.94 billion ($5.53 billion), based on an exchange rate of $1 equalling 1.4360 Australian dollars, and proposes a price of A$11.80 per share.
TDA currently holds between 20.36% and 20.5% of Challenger, with the proposal covering the remaining shares through a scheme of arrangement that would lift its equity stake to 100%. The offer price represents a premium of 19.8% over Challenger's closing share price on the before announcement. Challenger's shares rose more than 15% to A$11.33, reaching their highest level since 23 October 2018.
Several conditions must be met before any transaction can proceed. Due diligence must be completed satisfactorily, a scheme implementation agreement must be negotiated and signed, regulators must grant clearance, and Challenger's board must formally recommend the deal.
Daiichi Life confirmed in a separate statement that no decision has been made on proceeding with a binding transaction. TDA said the proposal is conditional and non-binding and that no binding transaction has been agreed.
Challenger's board said it is currently reviewing the indicative offer. The company warned shareholders that the indicative bid may not lead to a binding proposal or a completed transaction, and indicated that shareholders are not required to take any immediate action. Challenger said it will continue to update the market in line with its continuous disclosure obligations.
Alongside the takeover proposal, Challenger published a quarterly operational update showing assets under management rose 5% to A$31.9 billion in the first quarter of fiscal 2027. The company attributed the growth to strong annuity sales in both domestic and offshore markets, though quarterly portfolio growth was partially offset by capital distributions to shareholders.
The portfolio comprised A$27.7 billion in insurance investment assets and A$4.2 billion in third-party funds. Overall sales for the quarter rose 52% to A$4.4 billion, with fixed-term sales climbing 103% to A$2.2 billion and offshore reinsurance volumes growing 30% to A$320 million, while lifetime sales fell 2% to A$314 million.
Any transaction completing at the proposed price would result in Challenger shareholders receiving A$11.80 per share in cash under a scheme of arrangement.
Reporting: Reuters, Yahoo Finance
Written by Pick & Scroll News from the reporting and documents linked above.
