Fund managers are on stand-by for the next block trade out of Challenger by Apollo Global Management after the private equity firm offloaded stock in September.
The escrow that prevented any trading in the company ended on December 3, which means that most expect a sell down by the private equity firm is imminent.
The stake is worth about $420m, and the share price has remained relatively stable since the transaction.
Apollo reduced its stake in Challenger in September from 20.1 per cent to 9.9 per cent, making Japan’s MS&AD once again its largest shareholder with about 15 per cent.
Citi analyst Nigel Pittaway had earlier said that investors remained understandably concerned that the sale of Apollo’s 10 per cent remaining stake may be imminent after its December 3 escrow and this remained an overhang for the Challenger stock.
The $720m investment by Apollo in 2021 was understood to be a decision made by global annuities provider Athene, which Apollo was buying at the time, and some say the holding opens up conflicts when it comes to debt transactions, determining whether they were carried out through Apollo, Challenger or Athene.
Apollo also may not be a huge fan of the Australian annuities market, say sources.
In the September sale, shares were sold at $6.51 in a block trade executed by Goldman Sachs and Jarden.
In the last two trading days after the selldown, the stock fell to $6.23 from $7, down 11 per cent.
Shares on Thursday closed at $6.20, up 1.1 per cent.
The deal would follow CIC’s $1.9bn block trade out of Goodman Group this week and Auckland Council’s $NZ1.3bn exit out of Auckland Airport through the sale of its 9.71 per cent stake at $NZ8.08 per share through UBS.
Shares closed up 3.3 per cent in Australia after the deal to $7.50.
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