iSelect accepts $72m takeover deal by Innovation Holdings
The company that owns competitor website ‘Compare the Market’ has offered $72 million to acquire iSelect.
The board of Australian comparison website iSelect (ASX: ISU) has announced its approval of a $72 million takeover deal by Innovation Holdings Australia (IHA), the company that owns its competitor, Compare the Market.
IHA and its associates currently hold 26% of iSelect’s shares and has proposed to acquire all the remaining shares by way of a scheme of arrangement.
If the scheme is implemented, iSelect shareholders will receive cash consideration of $0.30 per share for the transfer to IHA. This represents an 87.5% premium to Tuesday’s closing price, as well as the three-month volume weighted average price, of $0.16.
After careful consideration, the iSelect board has recommended that shareholders accept the transaction.
“The directors of iSelect unanimously recommend that shareholders vote in favour of the scheme, subject to there being no superior proposal and the independent expert concluding that the scheme is in the best interests of iSelect shareholders,” iSelect chairman Brodie Arnhold said.
“The scheme provides an opportunity for shareholders to realise a significant premium to market value for their shares and provides the certainty of an all-cash offer,” he added.
IHA is an investment of Reef Investment Consortium, which holds assets in the insurance and related sectors including the Compare the Market (comparative website) and Auto & General (insurance) businesses.
Major shareholders in support of the deal
Major iSelect shareholders Thorney Investment Group (which holds 14.34%) and Microequities Asset Management (9.5%) have both advised they intend to vote to accept the scheme, in the absence of a superior proposal and subject to the independent expert’s recommendation.
The scheme implementation arrangement is subject to approval by the Australian Competition and Consumer Commission (ACCC) as well as standard conditions including shareholder approval, court approval, an independent expert confirming the transaction is in the best interests of iSelect shareholders, there being no regulated events which occur in relation to iSelect, and warranties provided by iSelect being true and correct at the date of the arrangement and the second court date.
The arrangement also contains exclusivity provisions including ‘no shop, no talk’ due diligence restrictions.
The first court date is expected in October with the scheme meeting planned for November and implementation date anticipated between December 2022 and March 2023.