Diverger’s Centrepoint bid called off

A potential merger between Diverger and Centrepoint Alliance that would have created the industry’s third largest licensee has been called off after talks failed to progress.

Diverger proposed the acquisition of Centrepoint in late June, which would have put it behind only Insignia and AMP in terms of adviser numbers.

Updating the ASX on Monday morning, Centrepoint stated discussions with Diverger had not progressed and, reiterated its view, the non-binding offer did not adequately reflect the company’s value. However, it stated it will continue to consider “industry consolidation opportunities”.

Diverger added that after initiating discussions and presentations with Centrepoint’s directors there was yet to be “meaningful engagement” from the board, and it had not been granted the ability to conduct any due diligence.

Diverger believed there were “compelling benefits” to both organisation’s shareholders and advisers through creating a combined entity that would create a market-leading adviser business.

The 32.5 cent per share offer price represented a 29.8 per cent premium to Centrepoint’s Volume Weighted Average Price for the six months to 22 June 2022.

According to figures from Wealth Data at the time the merger was proposed, Centrepoint had 521 advisers while Diverger had 464.

Diverger managing director Nathan Jacobsen previously told Professional Planner the merger provided scale. “What the scale brings is capacity to invest,” he said.

“With the withdrawal of the large institutions from the market many of the service providers are small companies who have limited resources not dissimilar to the advice practices themselves.”

Diverger was previously known as Easton Investments Management and holds the licensees for Merit Wealth, GPS Wealth, Paragem and the SMSF Expert.

Centrepoint previously acquired ClearView’s wealth arm last August which included Matrix Planning Solutions and Clearview Financial Advice which helped ClearView separate its product and advice businesses.