Skip to content

Challenger's Pepper Money deal stokes share buyback concerns

The annuities giant's circa $300 million acquisition of a stake in Pepper Money has received a frosty response from sections of the market.

Brandon How
Make us a preferred source
Shareholders are concerned that the Pepper Money transaction could undermine a planned share buyback. Steven Saphore/AAP Image.

Annuities giant Challenger’s move to acquire a stake in non-bank lender Pepper Money has received a frosty reception from sections of the market, with shareholder Wilson Asset Management and analysts from Barrenjoey and Macquarie questioning the logic of any deal.

Pepper Money told the ASX on Monday it had received a non-binding proposal from Challenger to acquire a 25% stake in the business and help private equity firm KKR take it off the ASX. The AFR earlier reported on the talks between the parties.

While Pepper Money’s share price surged 27% on the news, Challenger shares dipped 3.5%.

Wilson Asset Management deputy portfolio manager Anna Milne is concerned the deal could undermine Challenger share buyback program.