Investing.com -- Challenger shares surged to an almost eight-year high on Monday after a unit of Japan's Daiichi Life proposed acquiring the Australian retirement income provider in a deal valuing the company at A$7.94 billion ($5.5 billion).
The stock climbed 16.65% to A$11.49, its highest level since October 22, 2018, while the broader S&P/ASX 200 was last trading little changed.
TAL Daiichi Life Australia, a unit of Daiichi Life Group, offered A$11.80 per share to acquire the remaining 79.5% of Challenger it does not already own, increasing its stake to 100%.
The proposal represents a 19.8% premium to Challenger's last closing price of A$9.85 and a 17.7% premium to its one-month volume-weighted average price of A$10.03. Challenger said its board was considering the offer.
Daiichi Life already holds 20.36% of Challenger, having initially acquired a 15.1% minority stake from MS&AD Insurance Group Holdings in April 2025.
The takeover approach came as Challenger reported stronger business momentum in the first quarter of its 2027 financial year. Assets under management rose 5% quarter on quarter to A$31.9 billion, while total sales increased 52% year on year to A$4.4 billion.
The proposed acquisition would give Daiichi Life full ownership of Challenger, which specialises in retirement income products including annuities. The board has not yet recommended the proposal, leaving the outcome dependent on further review and the satisfaction of the offer's conditions.
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