ClearView offloads chunk of Centrepoint Alliance stakeBY CASSANDRA BALDINI | FRIDAY, 17 NOV 2023 11:47AM
Read more: ClearView, Diverger, CAF, ASX, COG Financial Services, Count, Centrepoint Alliance for, Financial Standard
COG Financial Services has taken over part of ClearView's stake in Centrepoint Alliance (CAF) for $13 million.
After dumping its bid for Diverger on Wednesday, COG has purchased approximately 39.56 million CAF shares at 33 cents per share from the insurer, using a combination of cash and debt to fund the acquisition. This equates to 19.9% of the business.
ClearView said it obtained a 24.5% holding in Centrepoint in November 2021 as part of the arrangement for selling its financial advice businesses to Centrepoint. However, ClearView remains solely focused on its life insurance business, opting to divest most of its holding.
"The transaction reflects ClearView's ongoing simplification and transformation into a life insurance company that is focused on expanding its position in the life insurance market," ClearView told Financial Standard.
In an announcement to the ASX, COG also reinforced its core strategy, which has two key components. It said the first area of focus is to own interests in businesses that distribute financial services. Such as, asset finance broking, novated leasing, and insurance broking.
Additionally, COG said it remains focused on building a scaled company in retail funds management.
"The strategic rationale for the acquisition of the CAF interest is that it builds on the first limb of COG's strategy," it explained.
"By acquiring the CAF stake, COG is further applying its expertise in the identification, due diligence, integration, and management of interests in financial services distribution businesses, in this case, wealth management services."
Earlier in the week, COG scrapped its bid for Diverger, citing concerns that shareholders may not support its $27 million offer. COG had intended to pay $1.4083 per share for the outstanding Diverger shares.
Its proposal originally implied a $56 million equity value for Diverger and represented a 32% premium to the current share price of $1.07 per share.
However, in a statement to the ASX, COG said it felt that Diverger's major shareholders, who could influence the vote on the offer, would be unlikely to support its proposal.
In a separate announcement, Count and Diverger confirmed they've entered into an amending deed, under which Count has agreed to acquire 100% of the fully diluted share capital in Diverger.
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