Thursday 11th August 2022
Diverger forced to walk away from Centrepoint takeover bid after talks fail to progress
A merger that would have created the third largest licensee is cancelled.
ASX-listed accounting and wealth management services firm Diverger has withdrawn its takeover bid for Centrepoint Alliance after talks between the two parties failed to gain any “meaningful traction.”
In late June, Diverger proposed a $63.5 million cash and scrip non-binding bid at 32.5 cents a Centrepoint share. The bid was pitched at a 30 per cent premium to the pre-bid price. The combined entity would have created the third-largest Australia licensee with 985 advisers.
Last November, Centrepoint successfully completed and integrated the acquisition of ClearView’s Advice business and achieved net adviser growth last financial year. Diverger has also been on an acquisition spree, buying a 35 per cent equity interest in McGregor Wealth Management (MWM) and growing its list of adviser practices and leading accounting brands. These unique brands include — GPS Wealth, Paragem, Merit Wealth, Knowledge Shop and TaxBanter and its backing by HUB24, which has a 31 per cent stake in Diverger.
Centrepoint’s management has stated that the non-binding offer does not adequately reflect the company’s value.
“Centrepoint is well-advanced with plans to accelerate growth and diversify revenue by leveraging other capabilities such as Centrepoint Lending, scaling its investment business by extending its managed account offering, and investing in financial services technology to improve the efficiency of its advice processes,” the Centrepoint board stated.
Diverger countered by saying the offer was pitched at a 30 per cent premium to the pre-bid price and there were “compelling benefits” to shareholders and advisers. Management has had several discussions with the Centrepoint Alliance board regarding the Indicative Proposal, with “some of the assumptions upon which it based the indicative proposal may be unlikely to be achieved,” according to the Diverger company announcement.
“Diverger has highlighted to Centrepoint Alliance that while this may not necessarily have prevented a transaction from proceeding on the terms outlined in the Indicative Proposal, it did reinforce the necessity for Diverger to have access to due diligence which to date has not been granted.”
Without any meaningful engagement by the Centrepoint Alliance Board, Diverger couldn’t progress the takeover bid any further, but it still hopes that a deal can be done, and continues to believe there are compelling benefits for shareholders and advisers in both companies.
Ishan is an experienced journalist covering The Inside Investor and The Insider Adviser publications.
