ClearView's biggest shareholder to resist takeover bid

THE biggest single shareholder in ClearView Wealth will resist a $220 million takeover of the mid-sized life insurer, labelling the private equity offer as "wholly inadequate".

By InvestSMART · 13 Jul 2012

By InvestSMART ·
13 Jul 2012

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THE biggest single shareholder in ClearView Wealth will resist a $220 million takeover of the mid-sized life insurer, labelling the private equity offer as "wholly inadequate".

Even so, the listed ClearView has been put in play after Crescent Capital Partners made the 50? a share all-cash offer for the financial services company.

But the investment house Guinness Peat Group, which has a 47.8 per cent stake in ClearView, is likely to hold out for a higher offer.

"The price offered represents a substantial discount to the fair value of ClearView Wealth and is wholly inadequate," GPG said.

Shares in ClearView jumped more than 15 per cent yesterday to 53.5?, following Crescent Capital's offer.

The move by Crescent suggests the next round of wealth-management consolidation is under way. This week, the Westpac-owned BT Financial signalled a "land grab" in the industry and predicted takeovers and greater investment as banks positioned themselves for a slice of the growing superannuation and wealth pie.

The ClearView chairman, Ray Kellerman, said the board was in the process of considering details of the conditional and unsolicited offer.

"Further information will be provided to the market and shareholders once the board has completed a careful assessment of the offer," Mr Kellerman said.

"At this stage we are advising shareholders to take no action in respect of their shares in ClearView."

ClearView has long been considered a prime takeover target.

"ClearView's exclusive distribution agreement with one of the country's biggest private health insurers, Bupa, and the planned entry into the third-party planner channel are key attractions to potential suitors," the brokerage Investorfirst Securities said in a report.

ClearView has about $1.5 billion in funds under management.

Crescent already has a 12 per cent stake in ClearView from put and call options. However, this means broader turnover in the stock is limited.

The Crescent Capital managing partner Michael Alscher said the offer provided an opportunity for ClearView shareholders to sell some or all of their shareholding at a premium in a company that had "low historical trading volumes and liquidity".

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Frequently Asked Questions about this Article…

What takeover offer has been made for ClearView Wealth?

Crescent Capital Partners has made an unsolicited all-cash takeover proposal for ClearView Wealth as part of a deal reported to value the company at about $220 million. The offer has put the listed life insurer into play and prompted market attention.

Who is opposing the ClearView takeover and why?

The biggest single shareholder, Guinness Peat Group (GPG), which holds a 47.8% stake in ClearView, has said it will resist the bid. GPG described the proposed price as a substantial discount to ClearView’s fair value and called the offer "wholly inadequate," indicating it is likely to hold out for a higher price.

How did ClearView shares react when the takeover offer was announced?

ClearView shares rose sharply after the offer was revealed — the article reports a jump of more than 15% — reflecting increased investor interest and the prospect of a takeover. The share movement followed Crescent’s announcement of the all-cash proposal.

What are ClearView’s directors advising shareholders to do right now?

ClearView’s chairman, Ray Kellerman, said the board is carefully assessing the conditional and unsolicited offer and has advised shareholders to take no action in respect of their ClearView shares until the board provides further information.

Why is ClearView considered an attractive takeover target for buyers?

Brokers and analysts point to ClearView’s strategic assets — including an exclusive distribution agreement with major private health insurer Bupa and planned entry into the third‑party planner channel — plus about $1.5 billion in funds under management. These features make the business appealing to potential suitors amid industry consolidation.

What stakes do the key parties hold in ClearView?

Guinness Peat Group holds a 47.8% stake in ClearView. Crescent Capital already has about a 12% economic interest via put and call options, which the article says limits broader trading liquidity in the stock.

What reasons did Crescent give for making the all-cash offer to ClearView shareholders?

Crescent’s managing partner, Michael Alscher, said the offer gives ClearView shareholders the chance to sell some or all of their holdings at a premium in a company that has historically had low trading volumes and limited liquidity.

Could the ClearView bid signal wider consolidation in the wealth-management sector?

Yes. The article suggests Crescent’s move is part of a broader trend of consolidation in wealth management. BT Financial (owned by Westpac) has signalled a potential "land grab" in the industry, predicting more takeovers and increased investment as banks position for growth in superannuation and wealth management.