Conceding there is a lack of interest from key Diverger shareholders, COG has formally withdrawn its counteroffer for the listed licensee.
In an announcement to the ASX on Wednesday morning, COG said it continues to believe the offer it made at the end of October was a superior proposal to a bid launched for Diverger in September by the listed licensee Count.
COG’s announcement said it had “formed the view that [Diverger’s] major shareholders who could control the vote on the offer, in the absence of any public statements to the contrary, are unlikely to vote in favour of COG’s offer”.
After the Count takeover was announced in September, Diverger was punted squarely into play by the emergence of the second takeover offer, albeit non-binding and conditional.
The possibility of competing bids for Diverger, which includes the GPS Wealth licensee, is further evidence of licensee businesses exploring ways to achieve scale and to develop new technology, services and revenue streams to support their advisers.
Count has already acquired the risk-orientated Affinia licensee from TAL, and the addition of Diverger to the fold would lift group adviser numbers to more than 770, based on data provided to Professional Planner by Adviser Ratings and current as of 19 October. A combined Count/Diverger group would rank (also based on Adviser Rating numbers) as the third-largest licensee group, behind only Insignia with 955 advisers and AMP with 872.
It’s the second time in just over a year that Diverger has been involved in takeover activity. In June 2022 it bid about $65 million to acquire the listed Centrepoint Alliance. Diverger went into it holding a call option over 19.99 per cent of the issues shares in Centrepoint, but still couldn’t get the deal over the line and withdrew the offer in August 2022.
Count announced on 22 September this year that it intended to acquire Diverger in a cash and scrip deal that valued the target at $1.14 a share, or about $43 million. The Diverger board unanimously supported the Count offer in the absence of a better offer, and the companies entered a binding scheme implementation arrangement.
Those plans were initially thrown into doubt after the COG bid was made, which valued the business at $1.41 a share, or about $53 million.
In a statement to the ASX dated 30 October, the Diverger board said it did not consider the COG offer to be superior to Count’s, while earlier this month Count managing director Hugh Humphrey told Professional Planner that the firm had the right to match any rival bid.