Challenger cuts Pepper Money takeover bid to $714 million

The Australia non-bank lender Pepper Money has received a revised takeover proposal from investment manager CHALLENGER LTD, valuing the company at A$1.01 billion ($713.7 million). This figure marks a decrease from the previous valuation of A$1.16 billion. The suitor reduced its offer due to ongoing deterioration in market conditions and the operating environment. Under the revised terms, shareholders would receive A$2.25 per share, down from the earlier A$2.60 per share offer tabled in February. Despite the reduction, the offer represents a 6.6% premium to the last closing price on March 16. Pepper Money stated that this is the best and final offer from the bidder, provided no superior proposal is received. The revised offer includes a final dividend of 7.8 Australian cents per share and any special dividends. An independent board committee is currently considering the proposal. Shares of the companies were not trading as of the announcement. This development comes as consolidation interest picks up across the consumer and non-bank lending sector, fuelled by a rebound in loan demand and stronger funding conditions. If the deal is finalized, Pepper Money would delist for the second time in its history. The firm, founded in 2000, was first listed in 2015 before being taken private by KKR & Co. Inc. in 2017. It later relisted in 2021 in the country's largest initial public offering of that year. Pepper Group ANZ HoldCo, which owns approximately 60% of the company, is a unit of Pepper Global Topco, which is owned by the United States private equity firm KKR.