Home / M&A / Centrepoint offer continues the consolidation trend in advice

Centrepoint offer continues the consolidation trend in advice

Diverger offer may not reflect 'value' but won't be the last
Centrepoint Alliance this week announced it had received a non-binding indicative offer from Diverger Limited to acquire all the shares in the company.

Centrepoint Alliance (ASX:CAF) this week announced it had received a non-binding indicative offer from Diverger Limited (ASX:DVR) to acquire all the shares in the company. The offer for CAF is:

  • Combination of cash and Diverger shares valued at 32.5 cents per CAF share
  • This price represented a 30% premium to Centrepoint Alliance’s last closing price, as at 22 June.

The combined firm would become the third-largest dealer group in the country and service more than 1,400 financial advisers.

In an announcement this week, Centrepoint said it had reviewed the offer presented by Diverger, “however, the Board does not believe the offer fairly reflects the strategic value of CAF.” The shares are up 22 per cent at the time of writing, at 27 cents.

  • The Board went on to highlight the positives and benefits that Centrepoint Alliance can bring to the table, such as its 500 high-quality financial advisers operating as authorised representatives under Centrepoint Licences, 200 self-licensed practices and 700 advisers. It also highlights the benefits of consolidation referring to the acquisition of Clearview Advice. It has consolidated a financially stable licensee with strong recurring revenue, high-quality advisers and industry-leading services to these advisers.

    Whilst remaining supportive of the move, the Board said, “The Board is pleased to note Diverger’s NBIO is expressed as a collaborative approach to build a stronger, larger business with opportunity to participate in future growth, which should be substantial. The Board will meet with DVR to discuss the NBIO in the next week and will update the market if necessary.”

    Diverger is also confident in the proposal, saying it will lead to a significantly strengthened market-leading position with a greater operational scale with adviser numbers of more than 1,400 following the takeover. The new entity will be able to offer services that utilise both the skill and expertise of both Diverger’s and Centrepoint Alliance existing operations team and combined product offerings. Centrepoint Alliance will be able to leverage the technology capability and learnings from Diverger’s technology partnerships.

    “Diverger believes the indicative proposal provides compelling benefits to Centrepoint Alliance’s shareholders and licensee stakeholder,” the company said.

    Centrepoint looks forward to updating the market and demonstrating how its strategy is delivering strong earnings growth at its annual results investor update on 25 August 2022.

    Ishan Dan

    Ishan is an experienced journalist covering The Inside Investor and The Insider Adviser publications.

    Print Article

    Diverger forced to walk away from Centrepoint takeover bid after talks fail to progress

    A merger that would have created the third largest licensee is cancelled.

    Ishan Dan | 11th Aug 2022 | More
    What to watch for in the most anticipated earnings season for decades

    With a long list of economic headwinds having hammered global growth and dampened investor confidence, the upcoming (second-quarter) US reporting season is going to be an interesting one.

    Ishan Dan | 18th Jul 2022 | More
    Australian Ethical, Christian Super merger official

    Australia’s leading ethical investment manager, Australian Ethical, is set to grow its already significant $6.2 billion in assets under management after formalising a partnership with Christian Super.

    Staff Writer | 14th Jul 2022 | More
  • Popular posts: