Bell Financial Group's Strategic Acquisition of Selfwealth: A $57.7 Million Deal
BFG (BFG) Share Update November 2024 Sunday 24th
Bell Financial Group to Acquire Selfwealth in $57.7 Million Deal
In a significant move within the financial services sector, Bell Financial Group Ltd (ASX:BFG) has announced its intention to acquire Selfwealth Ltd (ASX:SWF) through a Scheme Implementation Deed. This acquisition aims to expand BFG's online broking business and enhance its market position.
Instant Summary:
- Bell Financial Group to acquire 100% of Selfwealth shares for $0.25 each.
- The deal values Selfwealth at approximately $57.7 million.
- Selfwealth shareholders can choose cash, scrip, or a combination of both.
- Acquisition expected to be accretive to BFG's earnings post-integration.
- Selfwealth Board unanimously supports the acquisition.
- Scheme meeting scheduled for March 2025.
Deal Overview
Bell Financial Group Ltd has entered into a Scheme Implementation Deed to acquire all outstanding shares of Selfwealth Ltd at a price of 25 cents per share. This transaction values Selfwealth at approximately $57.7 million, based on a fully diluted share count of 230,914,853 shares.
Selfwealth shareholders will have the option to receive cash consideration, scrip in BFG, or a combination of both, with the scrip component capped at 50% of the total consideration. This flexibility allows shareholders to tailor their compensation according to their preferences and market outlook.
Strategic Rationale
The acquisition is expected to significantly enhance Bell Financial Group's scale in the online broking sector, adding nearly 130,000 active portfolios and increasing the company's sponsored holdings by $11 billion, bringing the total to $94 billion. The integration of Selfwealth is anticipated to be materially accretive to BFG's earnings per share, driven by revenue and cost synergies.
Bell Financial Group Chairman Brian Wilson AO expressed confidence in the acquisition, emphasizing the intention to maintain the Selfwealth brand and further develop its client value proposition. This strategic move is expected to foster ongoing growth and strengthen BFG's market position.
Support and Conditions
The Selfwealth Board has unanimously recommended that shareholders vote in favor of the Scheme, with each director intending to vote their shares accordingly, barring a superior proposal and contingent upon an independent expert's favorable conclusion.
The Scheme is subject to customary conditions, including shareholder and court approvals, and the absence of any material adverse changes to Selfwealth's business. The Scheme meeting is slated for March 2025, with legal advisement provided by Ashurst.
The acquisition of Selfwealth by Bell Financial Group is poised to enhance BFG's competitive edge in the financial services sector. The expected accretion to earnings per share and the significant increase in active portfolios and sponsored holdings are likely to boost investor confidence and potentially drive up BFG's stock price.
However, the transaction's completion is contingent upon several conditions, and any delays or complications could impact market sentiment. Investors will be closely monitoring the progress of the Scheme and its implications for BFG's strategic growth.
Investor Reaction:
Analysts are likely to view this acquisition favorably, given the potential for increased market share and earnings growth for Bell Financial Group. The unanimous support from the Selfwealth Board further underscores the strategic alignment and potential benefits of the deal. However, investors may remain cautious until the Scheme's conditions are fully met and the transaction is finalized.
Conclusion:
Bell Financial Group's acquisition of Selfwealth represents a strategic move to bolster its online broking capabilities and market presence. Investors should stay informed on the progress of the Scheme and consider the potential long-term benefits of this acquisition. As the financial services landscape continues to evolve, strategic acquisitions like this one will play a crucial role in shaping the industry's future.