Why Has AUB Board Granted Exclusivity to EQT on $45 Per Share Bid?
AUB Group has received a revised $45 per share acquisition proposal from EQT, prompting the board to grant exclusivity for due diligence. The deal remains non-binding and subject to multiple conditions.
- EQT offers $45 cash per AUB share, up from prior $43 offer
- Proposal contingent on exclusivity, due diligence, and unanimous board approval
- AUB board agrees to six-week exclusivity period starting 8 October 2025
- Shareholders advised no immediate action required
- Macquarie Capital and Allens appointed as financial and legal advisers
Background to the Proposal
AUB Group Limited, a prominent player in the Australian insurance broking sector, has confirmed receipt of an unsolicited, non-binding indicative proposal from Arbutus Pte. Limited, an entity affiliated with global investment firm EQT AB. The proposal, which supersedes an earlier $43 per share offer, values AUB at $45 cash per share and contemplates a full acquisition via a scheme of arrangement.
Board's Strategic Response
After careful deliberation, the AUB board has decided to enter into a confidentiality and exclusivity agreement with EQT. This move grants EQT access to conduct confirmatory due diligence over a six-week period commencing 8 October 2025. The exclusivity arrangement restricts AUB from soliciting or engaging with competing proposals, underscoring the seriousness of EQT's interest and the board's willingness to explore the transaction in depth.
Conditions and Caveats
The proposal remains subject to several key conditions, including the completion of due diligence, unanimous recommendation by the AUB board, final internal approvals by EQT, and the execution of a scheme implementation deed. Notably, the offer price will be adjusted downward by any dividends declared or paid by AUB, except for the recently announced $0.66 per share dividend. The board has emphasized that there is no certainty the proposal will culminate in a transaction, and shareholders are advised to take no immediate action.
Market and Shareholder Implications
The $45 per share offer represents a premium over the prior unsolicited bid and reflects EQT's commitment to securing the acquisition. For shareholders, this proposal could signal a lucrative exit opportunity, though the non-binding nature and conditionality mean the path to completion is still uncertain. The exclusivity period effectively sidelines other potential bidders, at least temporarily, which could influence market dynamics and share price movements in the near term.
Advisory and Next Steps
AUB has appointed Macquarie Capital as its financial adviser and Allens as its legal adviser to navigate the complexities of the potential transaction. The board has pledged to keep the market informed of any material developments. Investors will be watching closely for updates on due diligence outcomes, any competing proposals, and the board's final recommendation.
Bottom Line?
As exclusivity locks in, all eyes turn to due diligence and whether a binding deal will emerge.
Questions in the middle?
- Will any competing bids emerge during or after the exclusivity period?
- How will AUB's dividend policy be managed amid the acquisition talks?
- What are the potential regulatory hurdles for EQT's full acquisition of AUB?
