Australia’s Pepper Money said on Wednesday it has rejected the takeover proposal from Challenger as the offer was not “reasonably capable of execution”, a week after the bidders lowered the price, citing worsening market conditions.
The offer had valued Pepper Money at A$1.01 billion ($706.09 million).
Challenger, along with majority shareholder Pepper Group, first tabled an offer to acquire Pepper Money in February at A$2.60 per share, valuing the non-banking lender at A$1.16 billion.
The firm, however, reduced its takeover offer to A$2.25 per share last week due to the ongoing deterioration in both market conditions and the operating environment.
“Challenger cutting its offer price to A$2.25 per share effectively killed the deal,” said Cliff Man, CEO at ETF Shares.
“It would be difficult for Pepper Money to convince shareholders that the bid still offers an attractive premium.”
Pepper Group ANZ HoldCo, Pepper Money’s top shareholder with about a 60% stake, is a unit of Pepper Global Topco, which is in turn owned by U.S. private equity firm KKR.
Pepper Money said the talks had fallen through after its independent board committee determined the revised offer was beyond execution, prompting the firm to end the takeover talks.
“IBC has decided not to proceed with the transaction, and discussions with Challenger in relation to the revised proposal have now ceased,” Pepper Money said in its statement.
Shares of Pepper Money fell as much as 8% in early trade, hitting their lowest level since June 2, 2025, whereas Challenger gained as much as 5.6% to its highest level since March 4.
If the offer had gone through, Pepper Money would have had to leave the stock exchange for the second time in its history.
Founded in 2000, the firm was first listed on the Australian stock exchange in 2015 before KKR took it private in 2017. Pepper Money was then relisted in 2021 in what was then Australia’s biggest initial public offering of the year.
Source: Reuters.com