Challenger open to TAL takeover at a better price

Challenger will continue to engage with TAL Daiichi Life to get a better offer price, after it rejected the takeover bid earlier this week, stating the offer falls short of a level it could recommend to shareholders.

TAL is Challenger's largest shareholder and is proposing to acquire the remaining 79.5% stake it does not already own for $11.8 per share, valuing the retirement income provider at $7.8 billion.

"TAL Daiichi Life is Challenger's largest shareholder and an important commercial partner, and we value that relationship," Challenger chair Duncan West said.

"Accordingly, the board finds it appropriate to engage with TAL Daiichi Life to determine whether a proposal can be reached that could be recommended to shareholders.

"There is no certainty that a binding offer or any transaction will result, and shareholders do not need to take any action at this time."

West added the interest in Challenger reflected its strategic position and the significant opportunities ahead.

He added throughout the process, the board's responsibility will be to act in the best interests of Challenger and its shareholders.

"As directors, we will assess the proposal against all relevant factors to ensure any decisions are based on careful, thorough and informed deliberations based on all material information, including advice from management and our legal and financial advisers," he said.

Challenger chief executive Nick Hamilton said the board will work through its process, but he is determined for it not to distract the momentum across the business.

Challenger reported a strong start to FY27, with total sales rising 52% to $4.4 billion as demand for guaranteed retirement income and fixed-term annuities lifted.

Challenger's asset under management (AUM) increased 5% over the September quarter to $31.9 billion, while net annuity flows reached $1.1 billion, representing annuity book growth of 6.3%.

Annuity sales climbed 72% to $2.8 billion, driven by fixed-term products and offshore reinsurance. Fixed-term sales more than doubled to $2.2 billion, supported by demand for longer-dated annuities and the launch of Challenger's Annuity-Backed Notes (CABN) funding program.