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| Subject: Challenger and CPH Investment to mergeJanuary 20, 2003 | |
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Author: Net asset backing Challenger 2.65 |
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Date Posted: 00:09:00 01/20/03 Mon Challenger and CPH Investment to merge January 20, 2003 Kerry & Jamie Packer Kerry Packer-controlled CPH Investment Corporation (CPH) and Sydney-based fund manager and life insurer Challenger International (CLI) have proposed a merger whereby CPH said it would offer 4.5 units for each Challenger share. CPH, the investment vehicle of Kerry and Jamie Packer, and Challenger would have a market capitalisation of approximately $930 million. “The merger will significantly strengthen the capital base of Challenger and provide improved access to capital for its existing and future business needs. Following the merger, CPHIC will have a substantial exposure to the fast-growing superannuation and funds management sector,” said CPHIC chairman, James Packer. Under the deal, CPH would acquire all of Challenger's ordinary shares by way of a scheme of arrangement. CPHIC would also acquire all Challenger's convertible notes and options “in a manner to be agreed.” CPH Management Limited, the responsible entity for CPHIC, has agreed to waive its base management fee in respect of the value of the Challenger investment until the CPHIC unit price exceeds 60c. The proposed merger terms value Challenger shares at $1.89 each, compared with their close Friday at $1.71. Bill Ireland, managing director of Challenger said: “We believe that the combination of Challenger and CPHIC will create a very strong financial services group with attractive prospects.” In view of the substantial interests that Consolidated Press Holdings Limited has in both Challenger and CPHIC and the perception that those interests could give rise to conflicts, Kerry and James Packer and associates Ashok Jacob and Lloyd Williams have resigned as directors of Challenger, which currently manages $11.5 billion of assets. The proposed merger is subject to a number of conditions, including obtaining approvals from both Challenger shareholders and CPHIC unit holders, from regulatory authorities such as the Australian Prudential Regulatory Authority (APRA), and from the Federal Treasurer. [ Next Thread | Previous Thread | Next Message | Previous Message ] |