Why the Pioneer Credit share price rocketed 20% higher today

The Pioneer Credit Ltd (ASX:PNC) share price has rocketed higher after admitting that it has received a non-binding takeover approach…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Pioneer Credit Ltd (ASX: PNC) share price has had a stunning start to the week.

In afternoon trade the Perth-based debt collector's shares have returned from a trading halt and are up 20% to $2.36.

Why is the Pioneer Credit share price rocketing higher?

This morning Pioneer Credit requested a trading halt whilst it prepared a response to an article in the Australian Financial Review claiming that it was a takeover target.

An announcement out of the company this afternoon reveals that the article was on the money and Pioneer Credit has a number of suitors.

According to the release, the company has received several confidential, non-binding, indicative proposals.

The most comprehensive of these proposal is a non-binding, indicative proposal for the acquisition of all its issued shares by way of a scheme of arrangement.

Although no figures were put forward, management advised that it would be "at a material premium to the current share price."

However, all the proposals are non-binding, indicative, and incomplete. They are also conditional on a number of items, including satisfactory completion of due diligence and board and regulatory approvals.

In addition to this, as the discussions are ongoing, management doesn't regard them as sufficiently advanced enough to warrant further disclosure at this time.

As a result, it has warned shareholders that there is no certainty that any proposal will result in a binding and board-recommended offer and advised them not to take any action at this stage.

What now?

I think investors ought to heed the company's advice and wait patiently for the situation to develop before taking any action.

In the meantime, if you're looking for exposure to the industry you could consider buying the shares of debt collection giant Credit Corp Group Limited (ASX: CCP) or even Collection House Limited (ASX: CLH).

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

Three exuberant runners dash towards the camera. One raises her arms in triumph; another jumps in the air with arms raised. The third runner gives a satisfied smile.
Share Gainers

3 ASX 200 shares going gangbusters in June

ASX 200 investors have sent these three stocks soaring in June. But why?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

Why Boss Energy, Judo Capital, Life360, and Paladin Energy shares are pushing higher

These shares are ending the week on a high. But why?

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

Today's trading gave ASX investors some much-needed relief.

Read more »

Happy man working on his laptop.
Share Gainers

Why Bubs, Codan, Life360, and Sayona Mining shares are charging higher

These shares are catching the eye on Thursday. What's going on?

Read more »

a cute young girl with curly hair sips a glass of milk through a straw with a smile on her face.
Consumer Staples & Discretionary Shares

Guess which A2 Milk rival's shares just rocketed 21% on US news!

Up 65% in 2024, A2 Milk shares remain the better performer, but this rival is making up ground today.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another horrid day for ASX investors this hump day.

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Share Gainers

7 ASX All Ords shares rocketing higher while the market sinks

These shares are avoiding the market weakness on Wednesday.

Read more »

A man sees some good news on his phone and gives a little cheer.
Share Gainers

Why Bapcor, Botanix, Judo Capital, and Woodside shares are rising today

These shares are having a better day than most on Wednesday.

Read more »