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

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

| More on:
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

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

  • 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.

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

A woman is unsure as she pours milk into a glass, has it gone sour?
Consumer Staples & Discretionary Shares

A2 Milk shares are down 19% this past month. Is it time to pounce?

It's been a volatile year for the milk company.

Read more »

Disappointed couple at a supermarket.
Consumer Staples & Discretionary Shares

1 ASX consumer staples stock down 20% to buy right now

Time to go shopping?

Read more »

A company manager presents the ASX company earnings report to shareholders at an AGM.
Consumer Staples & Discretionary Shares

What can owners of Coles shares expect at next week's AGM?

There will be plenty on shareholders' minds at the AGM.

Read more »

Businessman walking down staircase with suitcase, at sunrise
Consumer Staples & Discretionary Shares

How is the Domino's share price reacting to the CEO's departure?

Domino’s CEO Don Meij is stepping down after four decades with the pizza retailer.

Read more »

Young man sitting at a table in front of a row of pokie machines staring intently at a laptop. looking at the Crown Resorts share price
Consumer Staples & Discretionary Shares

Who unloaded $26 million worth of Star Entertainment shares?

They weren't prepared to bet on the company's future.

Read more »

A man looks a little perplexed as he holds his hand to his head as if thinking about something as he stands in the aisle of a supermarket.
Consumer Staples & Discretionary Shares

Should I buy Coles stock during this sell-off?

After its latest update, is this supermarket business a buy?

Read more »

A female Woolworths customer leans on her shopping trolley as she rests her chin in her hand thinking about what to buy for dinner while also wondering why the Woolworths share price isn't doing as well as Coles recently
Consumer Staples & Discretionary Shares

The Woolworths share price just hit a 52-week low: Is it a buy?

Is this stock in the bargain basket?

Read more »

Woman checking out new iPads.
Retail Shares

JB Hi-Fi share price lifts off on strong start to FY 2025

JB Hi-Fi held its AGM today and released its first quarter trading update.

Read more »