Why Challenger (ASX: CGF) is surging +17%
Challenger (ASX: CGF) has surged ~17% today after receiving a $7.97bn takeover proposal from Japanese insurance giant Daiichi Life Group. Through its Australian subsidiary, TAL Daiichi Life, the group has offered $11.80 per share to acquire the ~79.5% of Challenger it does not already own, representing a ~20% premium to Friday’s closing price of $9.85. Daiichi Life is already Challenger’s largest shareholder, with a ~20.5% stake, and the proposed acquisition would give it full control of the Australian annuities and retirement income specialist.
- with CGF trading ~$11.50 today the markets factoring in a successful bid.
The non-binding, conditional proposal has propelled Challenger shares to their highest level since 2018, highlighting the significant premium Daiichi Life is prepared to pay to secure full ownership. The transaction remains subject to due diligence, agreement on binding terms and the necessary approvals, meaning a completed takeover is noy yet guaranteed.
- We agree with the market, this deal looks likely to go ahead.
