Global Markets
Challenger rejects TAL Daiichi Life's A$11.80-a-share takeover proposal but keeps talks open
The Australian annuity provider's board says the Dai-ichi Life unit's indicative offer is too low, and will explore whether a revised bid can be agreed.
HedgeWeekly News Desk ·
Challenger's board said on Monday it will not recommend the A$11.80-per-share takeover proposal from TAL Daiichi Life Australia, the local unit of Japan's Dai-ichi Life and Challenger's largest shareholder. The board said the non-binding, conditional offer, which would be carried out by scheme of arrangement, does not reflect the company's value and prospects.
The door is not closed. Challenger said it will keep talking to TAL to see whether a revised proposal could be agreed that directors would back, while cautioning there is no certainty of a binding offer or a deal. Shareholders were told they need take no action.
TAL first tabled the offer on October 19 for the roughly 79.5% of Challenger it does not already own. Reuters put the bid's value at about A$7.94 billion (US$5.53 billion) at the time, a 19.8% premium to the prior close, and reported that Challenger shares jumped more than 15% to A$11.33, their highest since October 2018. Daiichi Life first bought a 15.1% stake from MS&AD Insurance Group in April 2025, and TAL's holding stood at 20.36% according to LSEG data cited by Reuters.
Why it matters: the bid landed on the same day Challenger reported a strong start to fiscal 2027, with total sales up 52% from a year earlier to $4.4 billion, annuity sales up 72% to $2.8 billion, net annuity flows of $1.1 billion and assets under management up 5% to $31.9 billion. That growth, plus a regulator-approved merger of its Fidante and Channel Capital fund platforms that will leave Challenger more focused on retirement income, gives the board grounds to hold out for more. With the shares already up about 35% over 12 months against a 3% fall in the S&P/ASX 200, investors will watch for a sweetened TAL proposal, the outcome of due diligence, and whether a large existing stakeholder's position deters rival bidders.