Diverger still hopeful of Centrepoint Alliance acquistion

Diverger is still hopeful its bid to acquire Centrepoint Alliance can get over the line despite getting knocked back just months ago.

In June, Diverger's bid to acquire the listed advice group — which saw an offer to acquire all shares in the firm for a combination of cash and Diverger shares valued at $0.325 per share offer price — was rejected with the Centrepoint Alliance board saying at the time that it “does not believe the offer fairly reflects the strategic value" of the company.

This week, Diverger provided an update on the proposal saying that it has engaged in a "number of discussions" with Centrepoint Alliance directors and that "some of the assumptions upon which it based the indicative proposal may be unlikely to be achieved".

"Diverger has highlighted to Centrepoint Alliance that while this may not necessarily have prevented a transaction from proceeding on the terms outlined in the indicative proposal, it did reinforce the necessity for Diverger to have access to due diligence which to date has not been granted," the ASX-listed company said in a statement.

"Diverger continues to believe there are compelling benefits to both Diverger and Centrepoint Alliance shareholders and adviser stakeholders in combining the two entities to create a market-leading adviser business with greater operational scale, expanded service offering and enhanced market liquidity."

In its own statement also released this week, Centrepoint Alliance — which services more than 500 highly qualified advisers who operate as authorised representatives under Centrepoint’s licences, and 200 self-licenced practices — said the discussions have not reached a point where shareholders require an update and reiterated that the current offer "does not adequately reflect the company's fair value".

If an offer can be agreed on, it would create one of the largest licensees behind only Insignia and AMP. Diverger entered the takeover bid, valued at a combined $63.6 million, with a 19.99 per cent share in Centrepoint Alliance it obtained via a call option with major shareholder Thorney Group.

Both Diverger and Centrepoint Alliance are scheduled to release their FY22 results on 24 August.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.