Challenger receives A$11.80-a-share takeover proposal from Dai-ichi Life unit

Challenger, the Australian retirement income and annuities company, said on Monday it had received a non-binding takeover proposal from TAL Dai-ichi Life Australia, a subsidiary of Japan’s Dai-ichi Life Group, at A$11.80 a share.

TAL Dai-ichi Life already holds about 20.5% of Challenger and has proposed acquiring the remaining 79.5% through a scheme of arrangement, which would take its ownership to 100%, Challenger told the ASX before the market opened. The proposal was received after the market closed on Friday 16 October, the company said.

Challenger said the price is a 17.7% premium to its one-month volume-weighted average share price of A$10.03.

The proposal is conditional on due diligence, a scheme implementation agreement on acceptable terms, approvals from regulators and a recommendation from Challenger’s board, the company said. The board is considering the proposal, and Challenger said there is no certainty it will lead to a binding offer or a transaction. Shareholders do not need to take any action, it said.

Challenger, founded in 1985, runs a life insurance company regulated by the Australian Prudential Regulation Authority that sells retirement income products such as annuities.