Challenger share price sweetens APFS deal

Challenger Financial Services Group’s formal acquisition of Associated Planners Financial Services (APFS) on Friday concluded at an almost $10 million discount to the industry anticipated $100 million price after Challenger shares dropped 6 per cent over the week.

The final price was $91.3 million after Challenger issued 203,146,130 shares on Friday at the morning’s opening price of $0.45.

“The share priced dipped in the week which took the heat of the $100 million [price-tag] and actually ended up being $10 million less,” APFS general manager Andrew Creaser says.

However Creaser is quick to add that any industry hype over the final sign-off price for the dealer group, based on Challenger’s share price, is incidental as the deal was a scrip-for-scrip offer.

“We made a decision three months ago that we were happy to do a 5.69 share swap, so once that decision was made the stock price was neither here or there. The consideration was 2.03 million shares and not $100 million.

“The market has known for some time that this was a scrip-for-scrip deal and that there was going to be an extra 8 per cent of Challenger stock issued, so any dilution effect would have already been factored in, I suspect,” Creaser says.

The group will now move to integrate Challenger-owned Garrisons and APFS with the aim of adopting a yet to be decided single brand early next year.

“We’re going through an integration process now and hope to be working from a single back-office within the next few months. We’re targeting November for that with the view to getting the licences together early next year,” Creaser says.

As for the brand the combined entity will take-on, Creaser says it is a “work in process”.

“We want to keep as many of the staff as we possibly can as we have some really talented people across the two groups,” he adds.