Pinned straw:
In trading Halt today with below response:
Likely driven by below article which ran yesterday int he AFR:
PSC Insurance rides sector growth as Goldman fields inbound interest
This column is not suggesting PSC has received a formal takeover proposal that would require disclosure. Goldman Sachs declined to comment.
Sources pointed to NYSE-listed Arthur J. Gallagher and the UK’s Ardonagh Group – both prolific deal-doers in Australia – as PSC’s would-be dance partners. But Robinson and his Paul Dwyer-chaired board are seeking a price tag of about $2.3 billion, and it was unclear whether the suitors’ interest would progress, the sources said.
The $US55 billion ($83 billion) inorganic growth story of Gallagher is particularly impressive. The insurance broker acquired 37 entities in the first nine months of 2023 that contributed about $475.3 million to annualised revenue. It finished the year by snapping up Cobram, Victoria-based Edgar Insurance Brokers for an undisclosed sum.
Ardonagh Group has also kept a close watch on the local sector’s burgeoning growth, acquiring Queensland-headquartered Envest a year ago. Envest is an insurance investment and distribution group with more than 31 financial services businesses under its belt and a footprint across Australia.
The monthly CPI indicator rose 3.4 per cent in the 12 months to January. The strongest price rises were seen in insurance and financial services, up 8.2 per cent, which fits with what QBE, Suncorp and IAG told their investors in February’s reporting season. The three big insurers have creamed it over the past 18 months, able to pass on premium increases well in excess of claims inflation.
Shares in PSC Insurance last closed at $4.85.
PSC Insurance enters into Scheme Implementation Deed with Ardonagh
PSC shareholders will receive A$6.19 per PSC share in cash, which represents a 32.7% premium to PSC’s undisturbed three-month VWAP.
Speculation is mounting The Ardonagh Group is closing in on PSC Australia in a deal expected to be worth over $2bn.
The chatter is emerging out of London about a transaction, and sources believe a sale may be agreed upon in about two weeks.
It comes after DataRoom reported last week the $1.9bn Australian-listed PSC struck an agreement with Ardonagh on its insurance underwriting agency in Australia.
PSC exited its agreement with its existing broker, Lloyds-backed Miller Insurance and entered into a deal with Ardonagh instead.
Now, the chatter is there is likely to be more to it, with Ardonagh closing in on the business.
PSC Australia has been working with Goldman Sachs to find a buyer, and speculation earlier emerged Marsh had been running the ruler over the insurance broker.
Arthur J. Gallagher & Co also looked into it but was put off by the price, as was Australian rival Steadfast.
The market has predicted Ardonagh had the most to gain from an acquisition because PSC generated a lot of revenue from London where Ardonagh, a trader, operates.
PSC Insurance announced on March 13 it had received multiple strategic approaches and was in discussions which may or may not lead to a takeover offer for the company.
Recent discussions were subject to due diligence and negotiation and remain incomplete, with any potential outcome highly uncertain, the company said.
In February, PSC Insurance upgraded its full year guidance to between $125m and $130m from $122m to $127m previously.
Net profit guidance was $83m to $87m compared to $82m to $86m previously.
The key driver was strong organic growth and several smaller acquisitions during the half.