Challenger’s Pepper Money Bid Rebuffed as $150m Buy-Back Cleared

Pepper Money Ltd ( (AU:PPM) ) has issued an announcement.

Challenger Limited’s confidential, non-binding and conditional proposal, made jointly with Pepper Group ANZ HoldCo Limited to acquire Pepper Money Limited, has been rejected by Pepper Money’s Independent Board Committee as not reasonably capable of execution, and Pepper Money has decided not to proceed. Challenger’s chief executive Nick Hamilton thanked Pepper Money’s management for their engagement and indicated the firms will continue their commercial relationship, while Challenger also confirmed it has secured all necessary regulatory approvals to proceed with its previously announced on-market buy-back of up to $150 million of ordinary shares.

The decision by Pepper Money to walk away from the revised takeover offer closes off a potential inorganic expansion avenue for Challenger in the specialty finance space, at least for now. However, securing regulatory clearance for the substantial on-market share buy-back gives Challenger additional flexibility in its capital management strategy and may support shareholder returns despite the setback on the acquisition front.

The most recent analyst rating on (AU:PPM) stock is a Hold with a A$2.00 price target. To see the full list of analyst forecasts on Pepper Money Ltd stock, see the AU:PPM Stock Forecast page.

More about Pepper Money Ltd

Challenger Limited is an Australian investment management firm focused on providing customers with financial security in retirement. The company operates a fiduciary funds management division and an APRA-regulated life division, and its subsidiary Challenger Life is Australia’s largest provider of annuities, targeting retirees and income-focused investors.

Average Trading Volume: 493,848

Technical Sentiment Signal: Hold

Current Market Cap: A$752.4M

For detailed information about PPM stock, go to TipRanks’ Stock Analysis page.