Australia's Challenger rejects Daiichi Life offer — The Japan Times

In Australia, the board of directors of financial company Challenger has rejected an indicative takeover proposal from Japan's Daiichi Life Group. At the same time, the company intends to continue negotiations with the Japanese insurer's Australian unit to determine whether a deal that the board could recommend to shareholders is possible.

Terms of the proposal

Last week, TAL Daiichi Life Australia offered to acquire the remaining 79.5% of Challenger shares for 11.80 Australian dollars per share. Under that valuation, the entire company would be worth about 7.9 billion Australian dollars, or $5.5 billion.

Challenger said the proposal received was not at a level the board could recommend to shareholders. The company also stressed that there is no guarantee that a binding offer will emerge or that a deal will be concluded, The Japan Times reports.

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Analyst assessment

Bloomberg Intelligence analyst Matt Ingram noted that the combined value of Challenger's individual assets exceeds the proposed price. In his view, a revised offer of between 12.50 and 13 Australian dollars per share could be more acceptable to the board of directors.

Challenger was founded in 1985 and, as of the end of March, managed assets worth 128 billion Australian dollars. The company is the largest provider of annuities in Australia's pension market.