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 www.comparethemarket.com.au.

| 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 www.comparethemarket.com.au.

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

A couple of friends at a rooftop party enjoying some hot and tasty Domino's pizza
Dividend Investing

Own Domino's shares? Today is pay day!

Eligible Domino’s shareholders can expect some welcome passive income today.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Consumer Staples & Discretionary Shares

If you'd put $20,000 in this ASX retail stock at the start of 2023, you'd have $134,000 now

This online retailer has executed a remarkable turnaround for its investors.

Read more »

Photo of two women shopping.
Earnings Results

Premier Investments share price jumps 9% on results and demerger plans

The Smiggle and Peter Alexander owner has released its results. How did it perform?

Read more »

a woman with lots of shopping bags looks upwards towards the sky as if she is pondering something.
Consumer Staples & Discretionary Shares

How a potential demerger could deliver a 10% upside for this ASX 200 stock

Investors might have even more reasons to love this ASX 200 stock if rumours are true.

Read more »

A smiling woman sits in a cafe reading a story on her phone about Rio Tinto and drinking a coffee with a laptop open in front of her.
Consumer Staples & Discretionary Shares

Why Goldman Sachs expects market-beating returns from Super Retail shares

Goldman Sachs thinks this retail share could offer big returns for investors.

Read more »

A happy boy with his dad dabs like a hero while his father checks his phone.
52-Week Highs

Why is the A2 Milk share price up 46% year to date and at a 52-week high?

This infant formula company's shares have delivered the goods this year.

Read more »

Happy man on a supermarket trolley full of groceries with a woman standing beside him.
Consumer Staples & Discretionary Shares

2 things I'm waiting for before buying Coles shares

I'm waiting for two things before I add Coles to my share portfolio.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Consumer Staples & Discretionary Shares

If I'd put $5,000 in Wesfarmers shares at the start of 2024, here's what I'd have now

Are investors smiling this year? Let's see how its shares have performed.

Read more »