At one stage on Tuesday morning the IOOF Holdings Limited (ASX: IFL) share price was one of the best performers on the ASX 200 today with a gain of 4%.
Since then the embattled wealth management company's shares have faded and are up 1.5% to $5.50.
Why did the IOOF share price shoot higher today?
This morning IOOF announced that it has agreed with Australia and New Zealand Banking Group (ASX: ANZ) to make certain changes to the contractual arrangements of the acquisition of the bank's One Path Pensions and Investments (P&I) business.
These changes have been agreed with ANZ to accommodate the likely delay to completion of the P&I Acquisition to later this calendar year following recent actions by the Australian Prudential Regulation Authority.
The release explains that the changes will allow the completion of a successor fund transfer (SFT), provide that completion of the P&I acquisition will occur subject to OnePath custodians and ANZ consent to the acquisition, and provide that the coupon rate of 14.4% per annum on the debt subscribed by IOOF from ANZ would be paid until the successor fund transfer was completed.
As a result, the final completion of the P&I acquisition by IOOF will now take place subject to the successful completion of the SFT and once OnePath custodians and ANZ provide the consent listed above.
The acting CEO of IOOF, Renato Mota, said: "We continue to work towards the effective completion of the initiatives outlined to the market on 21 December 2018 in relation to the APRA licence conditions. We remain confident that completion of the P&I Acquisition should be able to occur shortly after the SFT completion and we will continue to work co-operatively and constructively with ANZ to achieve this outcome."
While a delay is disappointing, I suspect that many investors had not expected this deal to go ahead at all. So, this is probably a good outcome for IOOF and explains the share price rise today.
