Oct 19 (Reuters) - A unit of Japan's Daiichi Life has made an indicative proposal to buy more than 79% of shares in Australian investment manager Challenger it does not already own, Challenger said on Monday.
Shares of the Australian firm jumped over 15% to A$11.33 by 2305 GMT, hitting their highest level since October 23, 2018.
Under the proposal, the Japanese insurer is offering A$11.80 apiece, valuing Challenger at A$7.94 billion ($5.53 billion). The offer represents a premium of 19.8% over the stock's
closing price on Friday.
The unit, TAL Daiichi Life Australia Pty, holds 20.36% of the Australian investment manager, according to LSEG. Daiichi Life, through its unit, had initially acquired a 15.1% minority stake in Challenger from MS&AD Insurance Group Holdings in April 2025.
The takeover proposal is subject to a number of conditions including satisfactory completion of due diligence, Challenger said on Monday.
"The Board of Challenger is considering the indicative offer," the Australian firm added.
In a separate statement, Daiichi Life confirmed that TAL Daiichi Life Australia has submitted a non-binding proposal to the board of directors of Challenger, adding that no decision has been made by the company on proceeding with the binding transaction.
Separately, Challenger reported a 5% rise in its assets under management to $31.9 billion for the first quarter of fiscal 2027, citing strong sales momentum across both domestic and offshore annuities.
($1 = 1.4360 Australian dollars)
(Reporting by Shivangi Lahiri in Bengaluru, additional reporting by Satoshi Sugiyama; Editing by Edmund Klamann, Cynthia Osterman and Deepa Babington)
