There is a growing theory that the Apollo Global Management-controlled Athene will not remain an 18 per cent shareholder of financial services company Challenger for long.
Athene, which is being purchased by Apollo, announced earlier this month that it had secured a 15 per cent stake in Challenger and was awaiting approval from the Australian Prudential and Regulation Authority to take on an additional 3 per cent.
Challenger last year purchased Australian-based customer savings and loans bank MyLifeMyFinance and is awaiting the approval of its banking licence for this transaction. A party typically only needs APRA approval for a holding of more than 20 per cent, but because Challenger owns a superannuation trustee business, it cannot go over 15 per cent without approval.
Some believe the move to go to APRA by Athene is one where it is warming the regulator up to increase its holding over time and potentially embark on a buyout of the entire company.
JPMorgan analysts said they would wait to see whether Athene wanted a Challenger board seat when the annuities provider reports its full-year earnings on August 10.
Athene bought in at $6 a share this month, and the analysts take the view that the risk of a takeover by Athene is far greater than Challenger’s existing major Japanese shareholder MS & AD Insurance Group, which holds about 15 per cent of the company. This is given that it runs a similar business to Challenger.
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