Challenger Limited told the Australian Securities Exchange on Monday that it had received a non-binding indicative offer from TAL Daiichi Life Australia to acquire the remaining 79.5 percent of its shares at A$11.80 each by scheme of arrangement. The price values Challenger at about A$7.94 billion (5.53 billion United States dollars) and represents a 17.7 percent premium to the one-month volume weighted average price of A$10.03 and a 19.8 percent premium to Friday’s close.
Challenger shares rose 16.7 percent to A$11.49 in Monday morning trading, their highest level in eight years, as investors priced in a high chance the indicative offer becomes binding. TAL, Australia’s largest life insurer with more than a third of the market, is a wholly owned subsidiary of Daiichi Life Holdings, Japan’s second largest insurer. TAL already holds about 20.4 percent of Challenger, having first bought a 15.1 percent stake from MS&AD Insurance Group in April 2025, so the proposal is a consolidation of an existing position rather than a new entry.
The offer is conditional on due diligence, a scheme implementation agreement on acceptable terms, regulatory approvals and a recommendation from Challenger’s board, which said it is considering the proposal and advised shareholders to take no action. Daiichi Life confirmed in its own statement that TAL had submitted the non-binding proposal and that no decision had been made on proceeding with a binding transaction. A completed scheme would also need shareholder and court approval, and last year’s smaller stake purchase required clearance from the Foreign Investment Review Board and the prudential regulator APRA.
Challenger separately reported a strong start to its financial year, with assets under management up 5 percent to A$31.9 billion in the September quarter and annuity sales of 4.4 billion dollars, up 52 percent from a year earlier, on demand for guaranteed income products in Australia and Japan. The company is also merging its Fidante investment management business with Channel Capital, a deal expected to close before the end of the year, which would leave the group more purely focused on the retirement income business Daiichi is bidding for.