Pepper Money knocks back reduced Challenger acquisition bid, ends talks
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The news: Pepper Money has ended discussions to be acquired by Challenger after the investment management company lowered its offer last week.
The numbers: On 17 March, Challenger lowered its offer to buy Pepper Money from $2.60 per share to $2.25 per share citing “deterioration in both market conditions and operating environment”.
Pepper Money shares last closed at $1.68 while Challenger shares last closed at $7.92.
Challenger will now continue with its previously announced $150 million on-market share buy-back, which it has received regulatory approvals for.
The context: The revised offer was Challenger’s best and final offer in the absence of a superior proposal.
It was proposed that Pepper Money be jointly acquired by Pepper Group ANZ HoldCo Limited and Challenger, taking the company private. Challenger would have acquired no more than 25% of the target.
The independent board committee considered the revised proposal was “not reasonably capable of execution”.
The company also said it “is well positioned and continues to capitalise on growth opportunities”. As at the end of February 2026 mortgage and asset finance applications were 21% higher on the previous corresponding period while originations were up 34%.
What they said: “I would like to thank the Pepper Money management team for their engagement throughout the process and we look forward to continuing our commercial relationship,” Challenger managing director and CEO Nick Hamilton said.
