I’m not overly upset about the takeover falling through. Admittedly, there is a significant short term impact to the share price but long term this is a great company providing investors an opportunity to hold a steady compounder. I was surprised because the price drop for SDF as I imagine it is now a preferred takeover target and would have risen.

I hold both and have recently topped up on SDF but not at today’s lows. Mulling topping up on both

below from MS

AUB Group: Private Equity Pass 

Analyst Note

 Nathan Zaia,

Published on Dec 01, 2025

Private equity suitors are not proceeding with a proposal to acquire AUB for AUD 45 per share. With no binding proposal forthcoming since due diligence began in early October, discussions are terminated. Shares dived 17%, now lower than before the nonbinding proposal was announced.

Why it matters: No reason for why the deal fizzled is provided, but the statement that the AUB board believes AUD 45 per share appropriately values the firm might imply the private equity suitors were wanting to negotiate the price down.

• Since EQT and CVC Asia Pacific entered discussions with AUB, its larger Australian competitor Steadfast has seen its shares slide over 15%. The S&P/ASX 200 is also down around 3% over that period. Maybe the buyer figured they could pick up another great business at a better price.
• Steadfast currently trades on a forward P/E of around 15 times, below the 17 times AUB was trading on before the due diligence period commenced. Steadfast was on a P/E of 18 times before it announced its CEO was on the receiving end of workplace complaints in late October.

The bottom line: We revert to our stand-alone fair value for narrow-moat AUB of AUD 37.50, down from AUD 43.00, which incorporated a 75% chance of the takeover completing.

• Shares are materially undervalued. We view AUB as an above-average company with a positive earnings outlook, which means shareholders who bought in recent weeks likely just need to wait longer to be repaid. Private equity suitors not proceeding does not mean they found red flags.

Big picture: We see growth from higher insurance premiums over the medium term. Climate change increases the uncertainty of future claims, warranting higher premiums, and AUB gets a slice. Also, bolt-on acquisitions and margin expansion with scale should benefit earnings.

• We expect the general insurance pie to expand with single-digit premium increases and for AUB to take share of the intermediated general insurance market