Challenger aims for a stake in Pepper Money

The companies confirmed, today, that Challenger has lodged a non-binding indicative offer that will see it acquire no more than 25% of Pepper Money.

Under the proposed scheme of arrangement, Pepper Group ANZ Holdco Limited and Challenger will jointly acquire Pepper Money. Challenger will hold no more than 25% of total Pepper Money shares.

Pepper Money shareholders will receive a cash consideration equal to A$2.60 per share and the company will be taken private.

The parties said in statements today that discussions “while advanced, are incomplete and there is no certainty the offer will eventuate in any transaction”.

The Pepper Money board has established an independent board committee to assess the indicative proposal, which granted Challenger exclusivity to undertake due diligence and progress transaction documents.

Challenger says that an investment in Pepper Money would provide it with “strategic, long-term rights to access fixed income assets to support growth and returns”.

Pepper Money, was founded in 2000. It first listed on the Australian Stock Exchange in 2015, before being taken private when US private equity firm KKR acquired it in 2017. It was relisted on the Australian xxchange in May 2021 through an IPO that valued the non-bank lender at around A$1.3 billion.