Steadfast said on Thursday that Amwins Group and Dragoneer Investment have reconfirmed their takeover proposal, maintaining an offer of A$6 per share that places the Sydney-headquartered insurance broker at an enterprise value of A$7.7 billion. The reaffirmation has led to a four-week extension of the exclusivity period surrounding the proposed deal.
Offer mechanics and valuation
The consortium's A$6 per share proposal values the firm at an enterprise value of A$7.7 billion and equates to roughly $5.34 billion using the exchange rate cited in the announcement - $1 = 1.4426 Australian dollars. The price offered represents a 52% premium to Steadfast's last closing price before the original proposal was tabled.
History of approaches
This latest proposal is the third and highest approach presented to Steadfast. Two earlier bids - at A$5.50 and A$5.83 per share - were made but did not secure an agreement with the company. The A$6 offer now stands as the most recent effort by the consortium to obtain control.
Planned division of the business
Under the terms outlined in the proposed transaction, Amwins, an insurance distributor, would acquire Steadfast's underwriting agency operations. U.S.-based Dragoneer Investment would assume control of the retail brokerage business. The announced split delineates which party would take responsibility for the company's primary operating segments if the transaction proceeds as proposed.
Market reaction
In early trading the stock edged higher, with shares of Steadfast rising 0.4% to A$5.17. By contrast, the broader ASX 200 index was down 0.8% in the same session. The company and market figures above reflect the trading response as reported in the announcement.
Notes
- The consortium's reaffirmed offer is A$6 per share, valuing Steadfast at an enterprise value of A$7.7 billion.
- The offer equals a 52% premium to the last closing price before the original proposal.
- Previous bids of A$5.50 and A$5.83 per share were earlier approaches that did not result in a deal.
- Under the proposed deal, Amwins would acquire underwriting agency operations and Dragoneer would take the retail brokerage business.
- Steadfast shares traded at A$5.17, up 0.4%, while the ASX 200 was down 0.8%.
- Exchange rate used: $1 = 1.4426 Australian dollars.