Deakin Financial Services Grouphas unveiled plans to merge withAustChoice Financial Services, a move which would see a new top 10 player enter the dealer group arena.
If successful, the merged group will have funds under advice or administration of $1.7 billion, an network of approximately 430 advisers, and net revenues exceeding $8.7 million.
As part of the merger Deakin will make an offmarket takeover bid for all the ordinary and adviser shares in AustChoice, a move which will need approval from 90 per cent of the latter’s shareholders. The proposed arrangements value Deakin at $9.4 million and AustChoice at $27 million.
Under the arrangement, each AustChoice ordinary share will see two Deakin ordinary shares at an issue price of 11 cents each, while each AustChoice adviser share will see approximately 20 Deakin ordinary shares and approximately 60 Deakin converting preference shares (CPS) at an issue price of 11 cents, valuing the adviser shares at approximately $8.80 each.
Deakin will issue approximately 130 million ordinary shares and approximately 115 million CPS.
If the takeover is successful, Deakin executive chairman Rob Hunwick will act as chairman of the merged Deakin-AustChoice group, assisted by board members Christopher Kelaher, managing director ofSMF, and AustChoice director and Moneyplan Australia owner Peter Dunn.
The directors also aim to appoint a chief operating officer for the group if successful.
According to Hunwick, the merged group will continue to aggressively recruit adviser groups.
“We anticipated a number of advisers will, over time, be attracted to selling their business to a public company of scale that is not a bank or a life company,” Hunwick says.
The proposed merger is subject to shareholder approval of each company at respective annual general meetings in December this year, and also relies on the prior acquisition by AustChoice of AustSelect Holdings, the company which currently manages AustChoice.
