Pepper Money rallies on Challenger's acquisition offer
Make us a preferred source
Make us a preferred source on Google
More news: Shares of Pepper Money surged in morning trade after receiving a non-binding indicative offer from Challenger to acquire 25% of its stake.
Shares rose 25.57% to $2.21 at 12:40pm AEDT.
However, shares of Challenger tumbled 3.64% to $8.59.
Challenger offers to acquire 25% of Pepper Money
The news: Investment fund Challenger has lodged a non-binding indicative offer that will see it acquire no more than 25% of non-bank lender Pepper Money, the parties told the exchange.
The numbers: Under the proposed scheme of arrangement, Pepper Group ANZ Holdco Limited and Challenger will jointly acquire Pepper Money. Challenger will hold no more than 25% of total Pepper Money shares.
Pepper Money shareholders will receive a cash consideration equal to $2.60 per share and the company will be taken private.
The context: On Sunday, the Financial Review reported that private equity firm KKR’s portfolio insurance company Global Atlantic Financial was leading talks on the deal, which is expected to retain its existing 60% interest.
In response to media speculation, the parties confirmed the confidential, non-binding and conditional proposal on Monday. Challenger said the discussions “while advanced, are incomplete and there is no certainty the offer will eventuate in any transaction”.
The Pepper Money board has established an independent board committee to assess the indicative proposal, which granted Challenger exclusivity to undertake due diligence and progress transaction documents.
Pepper Money’s financial advisers are Jefferies Australia and Reunion Capital Partners while Gilbert & Tobin is its legal adviser. Challenger did not disclose if it had appointed advisers in its announcement on Monday.
The sources: ASX, ASX, The Financial Review
