There are two schools of thought on Challenger’s takeover prospects.
The bulls argue Challenger is an attractive bolt-on acquisition for a larger financial services company, given its dominant position in the growing retail annuities market. The bears counter that Challenger’s obvious suitors, the big-four Australian banks, are constrained by new requirements to hold more capital, and more likely to divest than acquire assets. There is logic in both views.
Challenger meets Switzer Super Report’s key criteria for inclusion in its takeovers targets list: it is an attractive investment at the current price regardless of takeover, and has long-term strategic value in its industry.