SDF appears to have fielded a takeover offer. This is hardly surprising. globally, the insurance brokers are well down, well bucketed really, due in part, first, to the insurance cycle softening. That is cyclical, and remember brokers can move between per cent of premiums and service fees to soften the blow, unlike underwriters who bear the full weight. Secondly, the AI existential threat. i have thought long and hard about this and see the possibility, but not the probability, of it significantly impacting the brokers. Like many AI discussions, it gets back to "Is AI God?" and will do everything. Brokers look reasonably well placed to me, given the regulatory requirements and small business complexity involved.
The brokers like SDF are very cheap if you believe that AI has minimal impact. Certainly, the industry participants believe that, and you may say of course they do, but they are the ones with the wherewithal and interest to make a bid.
Even at the usual 30% premium, its still cheap. At the last result, Rob Kelly, pointed out if anyone was coming $7-8 was the range they were interested in. Let's see if anyone stumps up that price, that would be a fair premium IMHO.
disc held
And offer made at $6/share. Circa 50% to last close price. Opportunistic and well timed given AI fears on top of their recent issues.
Well played - don't hate the player (Dragoneer), hate the game (market and AI).
Not held.
