Challenger weighs A$11.80-a-share offer from TAL Daiichi

Australian retirement-income business Challenger disclosed on Monday that it is weighing an A$11.80-a-share takeover proposal from TAL Daiichi Life Australia.

The Japanese-owned bidder wants to acquire the remaining 79.5% of ordinary shares it does not already own through a scheme of arrangement, taking its stake to 100%.

In its 19 October announcement, Challenger said it had received the proposal after the market closed on Friday, 16 October.

Board still considering proposal

The offer is indicative, non-binding and conditional. It requires satisfactory due diligence, an acceptable implementation agreement, regulatory approvals and a board recommendation.

Challenger put the price at a 17.7% premium to its one-month volume-weighted average of A$10.03. Reuters valued the whole company at about A$7.94 billion under the proposal.

The board is considering the approach. Challenger said shareholders need take no action and cautioned that neither a binding offer nor a completed transaction is assured.

Quarterly update released alongside offer

In a separate first-quarter update, Challenger reported A$31.9 billion in assets under management, up 5% over the quarter. Total sales rose 52% from the corresponding quarter a year earlier to A$4.4 billion.

Its planned merger of the Fidante funds-management business with Channel Capital remains targeted for later in the half-year, subject to approvals and separation work. Challenger would hold 45% of the combined business.

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