Brokerage sees big drop as A$5 billion deal collapses
AUB Group has announced that the two major firms involved in discussions to acquire it have advised they will not be proceeding, sending its shares tumbling in early trade. On the ASX this morning the brokerage group said EQT AB (EQT) and CVC Asia Pacific Limited (CVC) – together known as the Consortium – “has advised AUB that it does not intend to proceed with a binding proposal at a price of A$45.00 per share.” The parties have agreed to terminate discussions.
The broker’s shares have dropped sharply in response to the collapsed takeover talks. In early trade, the stock fell about 16.4% after the company confirmed that discussions with EQT and CVC had been terminated.
How the A$5bn bid unfolded
After more than a month of exclusive due diligence, the decision by Sweden’s EQT and CVC Capital Partners to walk away from the A$45-a-share proposal leaves AUB Group continuing as an independent listed broker and underwriting group, rather than being taken private in a deal that would have valued it at about A$5.25 billion.
The proposal from EQT and CVC emerged in mid-September, when EQT’s bid vehicle, Arbutus, lobbed an initial non-binding, indicative offer at $43 per share, before lifting this to A$45 per share two weeks later. AUB shares were trading at around A$32 when the interest was first revealed, meaning the consortium’s final price represented a sizeable premium to the undisturbed share price.
AUB granted the suitors a period of exclusive due diligence and allowed EQT to form a consortium with CVC, extending exclusivity to give the parties time to finalise transaction documents. Following this intense review, the consortium ultimately advised that it did not intend to proceed with a binding proposal at $45 per share, prompting the termination of talks.
Board holds the line on valuation
Despite the collapse of the bid, the AUB board has been explicit that it regards A$45 a share as an appropriate valuation for the group in current market conditions, signalling that it is not willing to entertain a lower price. Management is also stressing that the process has reinforced its confidence in the company’s strategy and earnings outlook. CEO and Managing Director Michael Emmett (main picture) says AUB “continues to deliver robust performance, underpinned by a clear strategy and disciplined execution” and that the demanding due diligence “reaffirmed our confidence in our improvement initiatives and long-term growth prospects.”
That confidence is backed by recent financial performance. In the year to June 30, AUB posted a 17% increase in net profit and revenue growth across the group, from its Australian and New Zealand broking operations through to wholesale broker Tysers. The agencies division, including Tysers, delivered a 30% increase in pre-tax profit to A$72 million, with agency revenue up 25.1% and margins expanding to 44.2%.
Growth outlook as AUB stays independent
AUB has reaffirmed its FY26 guidance for underlying NPAT of A$215–227 million, implying earnings growth of 7.4–13.4%, and says it sees “significant opportunities to grow profits in FY27 and beyond.” The group is now positioning the end of takeover discussions as a return to business as usual, with renewed focus on organic growth and further bolt-on acquisitions across its broker networks, agencies and digital platforms such as BizCover, which has been growing revenue at double-digit rates.
For investors, the breakdown of talks removes the immediate prospect of a control premium crystallising via a scheme of arrangement, and the share price is expected to adjust accordingly in the near term. But the board’s public stance on valuation, coupled with the underlying growth profile of the business and its strengthened position following the Tysers acquisition, suggests that strategic interest in AUB is likely to resurface if earnings continue to track the upgraded guidance.