iSelect share price explodes 75% on takeover news

The iSelect share price is sky high after the company revealed a takeover offer from the owner of

| More on:
A person with a round-mouthed expression clutches a device screen and looks shocked and surprised.

Image source: Getty Images

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

Key points

  • The iSelect share price has skyrocketed on news of a takeover offer 
  • The suitor is Innovation Holdings Australia, an investment of Reef Investment Consortium
  • Innovation Holdings is offering shareholders 30 cents per iSelect share held

The iSelect Ltd (ASX: ISU) share price has skyrocketed on news that the company has received a takeover offer.

In early morning trading, the iSelect share price is up 75% to 28 cents.

The iSelect board is unanimously recommending that shareholders vote in favour of the deal.

The offer has come from Innovation Holdings Australia (IHA), which owns

IHA is also an investment of the international private investor group, Reef Investment Consortium.

iSelect announced it has entered into a Scheme Implementation Agreement before the market open today.

IHA already holds 26% of iSelect shares. It proposes to acquire all other shares by way of a scheme of arrangement.

What's the offer to iSelect shareholders?

IHA is offering to buy iSelect at a price of 30 cents per iSelect share held. The iSelect share price closed yesterday's session at 16 cents.

In its statement, iSelect pointed out that the offer represents an 87.5% premium to that closing price.

The deal is subject to an independent analysis to ensure the deal is in the best interests of shareholders. It will also need approval from the Australian Competition and Consumer Commission.

iSelect anticipates scheduling a shareholder vote in November.

Major shareholders back the buyout

Major iSelect shareholders Thorney Investment Group and Microequities Asset Management Group Ltd (ASX: MAM) are in favour of the deal.

Thorney is a private investment group run by stock picker Alex Waislitz. It owns 14.34% of the iSelect shares on issue and Microequities Asset Management owns 9.5%.

iSelect shareholders do not need to take any action yet. They will receive a scheme booklet in October.

What did management say?

The Chair of iSelect, Brodie Arnhold, said: "The Scheme provides an opportunity for shareholders to realise a significant premium to market value for their shares and provides the certainty of an all-cash offer."

If all conditions are satisfied, iSelect expects the scheme to be completed between December this year and March 2023.

iSelect will release its FY22 full-year results during earning season on Tuesday 23 August.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

Two parents and two children happily eat pizza in their kitchen as a top broker predicts a 46% upside for the Domino's share price
Consumer Staples & Discretionary Shares

Buy Domino's shares for a 50% return and attractive dividend yield

Morgan Stanley believes investors should be grabbing a slice of this stock.

Read more »

businessman handing $100 note to another in supermarket aisle representing woolworths share price
Consumer Staples & Discretionary Shares

How is the Coles share price down 3% today?

Coles investors should be delighted with the company's share price drop today.

Read more »

Person with a handful of Australian dollar notes, symbolising dividends.
Consumer Staples & Discretionary Shares

The CEO of this ASX stock just sold $127m worth of shares

It is a very big pay day for this CEO.

Read more »

Man and woman sitting at casino table playing poker
Earnings Results

Star Entertainment share price jumps 5% on strengthening outlook

ASX 200 investors are bidding up the Star Entertainment share price on Thursday.

Read more »

Happy couple doing online shopping.
Earnings Results

Harvey Norman share price jumps to 52-week high on half-year results

A sharp profit decline isn't putting off investors today.

Read more »

Supermarket trolley with groceries on top of a red pointing arrow.
Consumer Staples & Discretionary Shares

Why the Coles share price could keep rising after the result

An expert has predicted more share price gains for Coles.

Read more »

Woman customer and grocery shopping cart in supermarket store, retail outlet or mall shop. Female shopper pushing trolley in shelf aisle to buy discount groceries, sale goods and brand offers.
Consumer Staples & Discretionary Shares

Is the Woolworths share price too good to pass on?

The supermarket chain has had a shocker this month. So is it time to pounce?

Read more »

A young woman wearing a silver bracelet raises her sunglasses in amazement, indicating positive share price movement in jewellery shares.
Consumer Staples & Discretionary Shares

I'd use the Warren Buffett method and buy this ASX stock

This investment is sparkling.

Read more »