Elanor Investors share price surges 17% on $3.4 billion Challenger funds deal

What are the details of this real estate funds management deal?

Key points
  • Elanor Investors is proposing to takeover Challenger's real estate funds management platform 
  • On the back of this news, Elanor shares are lifting almost 17% in Thursday morning trade
  • The takeover would more than double Elanor's assets under management 

The Elanor Investors Group (ASX: ENN) share price is charging ahead today amid a multi-billion dollar deal.

Elanor Investors shares are up 16.89% and are currently trading at $1.73 apiece. In contrast, the S&P/ASX 200 Index (ASX: XJO) is down 0.26% today.

Let's take a look at the details of this deal.

a man sits at his computer screen scrolling with his fingers with a satisfied smile on his face as though he is very content with the news he is receiving.

Image source: Getty Images

What are the details?

Elanor is a funds management business with billions of dollars of real estate assets in Australia and New Zealand.

Today, Elanor advised it plans to acquire 100% of Challenger Ltd's (ASX: CGF) $3.4 billion Australian real estate funds management business for an upfront consideration of $41.8 million.

After the transaction, Challenger would become Elanor's largest shareholder with an 18.2% stake. Elanor is planning to deliver 27.4 million shares to Challenger.

The takeover, if approved, will more than double Elanor's assets under management from $3 billion to $6.4 billion.

The deal is expected to deliver material earnings growth for Elanor in FY24. Elanor and Challenger have also entered into a strategic partnership.

Commenting on the news, Elanor chief executive Glenn Willis said:

We are pleased to have executed on a key strategic objective of the group to grow AUM through the acquisition of a significant real estate funds management platform. This is a transformational transaction for Elanor.

Combining Elanor's real estate funds management capability with Challenger's market leading capital raising platform delivers significant size and scale benefits, and positions us for further strong growth.

The acquisition is due to be complete by 30 June and is subject to both shareholder and regulatory approvals.

Elanor is planning to hold a shareholder meeting in mid-June.

Share price snapshot

The Elanor Investors share price has fallen nearly 20% in the last year.

Elanor has a market capitalisation of nearly $211 million based on the current share price.

Motley Fool contributor Monica O'Shea 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 recommended Challenger. 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 women and a man eating pizza at a party
Consumer Staples & Discretionary Shares

Domino's Pizza Enterprises vs Guzman y Gomez: Which fast food stock offers better value?

Comparing Domino's Pizza and Guzman y Gomez shares on valuation, yield, franking and recent momentum to spot which ASX fast…

Read more »

A woman wearing a black and white striped t-shirt looks to the sky with her hand to her chin, contemplating buying ASX shares.
Consumer Staples & Discretionary Shares

CAR Group vs Seek: Which ASX 200 stock is better value?

CAR Group and Seek both lead online classifieds, but which ASX share offers better value for Aussie investors right now?

Read more »

A man in a business suit rides a graphic image of an arrow that is rebounding on a graph.
Consumer Staples & Discretionary Shares

IDP Education vs G8 Education: Which battered ASX stock could rebound?

Both IDP Education and G8 Education have been smashed—here’s why I think one offers the more compelling rebound opportunity.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Consumer Staples & Discretionary Shares

If I buy $6,000 of Coles shares, how much dividend income will I receive?

Coles can be the source of strong dividend income.

Read more »

Two happy woman on a couch looking at a tablet.
Consumer Staples & Discretionary Shares

Adairs vs Temple & Webster: Which ASX retail stock wins for October?

Adairs and Temple & Webster both look beaten up, but only one stacks up as the stronger retail buy for…

Read more »

Woman holding several shopping bags.
Consumer Staples & Discretionary Shares

Lovisa vs Baby Bunting: Which ASX retailer is the better buy today?

Lovisa and Baby Bunting face off: which ASX consumer discretionary share deserves a place in your portfolio?

Read more »

Cropped shot of a mature businessman brainstorming and setting financial goals with notes on a glass wall.
Consumer Staples & Discretionary Shares

Tabcorp vs The Lottery Corporation: Which ASX gaming share comes out on top?

Breaking down Tabcorp vs The Lottery Corporation: which ASX gaming stock looks most attractive on dividends, value, and earnings this…

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Consumer Staples & Discretionary Shares

This ASX retail stock is sliding today after a surprise CEO exit

A major shake up has investors selling this ASX stock.

Read more »