The Selfwealth Ltd (ASX: SWF) share price is up another 3% after agreeing to a takeover deal with Bell Financial Group Ltd (ASX: BFG).
Selfwealth is one of the low-cost brokers that are available for Aussies to use. Bell is a financial institution that also offers brokerage, among other things.
Selfwealth takeover agreed
Selfwealth announced to the ASX that it has received a takeover offer of $0.25 per share.
This (improved) offer values the Selfwealth business at approximately $58 million. The offer is a premium of 108% compared to the Selfwealth share price of $0.12 on 12 November 2024, being the day before the initial proposal was announced.
After looking at this offer, Selfwealth believes it’s in the best interests of shareholders to accept the offer, so the board of directors is unanimously recommending that shareholders vote in favour of the proposal.
This offer is still subject to various conditions, including approval by Selfwealth shareholders.
What’s in it for Bell Financial?
Paying a premium of more than 100% is a hefty takeover bid.
Bell said its shareholders will benefit from the increased scale of its online broking business, and revenue and cost synergies. The company suggested the acquisition will make a sizeable difference to its profit / earnings per share (EPS) after integration and add almost 130,000 active portfolios, while increasing Bell’s sponsored holdings by $11 billion to $94 billion.
The Bell Financial Group Chair Brian Wilson said:
We look forward to working with Selfwealth to ensure a smooth integration of our two businesses with minimal client disruption. Our intention is to maintain the Selfwealth brand and to further develop the client value proposition which we expect will result in ongoing growth.
Final thoughts on the deal
I can understand why Selfwealth’s board wants to accept, it’s a huge price compared to earlier this month. However, some investors that bought during the COVID years of 2020 and 2021 may be disappointed.
It’s good to hear that Selfwealth will continue to operate as its own business, though hopefully the brokerage fees don’t change. Time will tell whether Bell is able to help grow Selfwealth’s profit without losing customer loyalty. I’d be happy to sell my shares today (at the current price of $0.26) if I already owned shares and invest in something else.