Elanor Investors Group (ASX:ENN) snaps up Challenger (ASX:CGF) real estate assets

• Elanor Investors Group (ENN) is set to acquire Challenger’s (CGF) $3.4 billion Australian real estate funds management business for $41.8 million
• Consideration will see Elanor issue 27.4 million shares to Challenger, representing 18.2 per cent of ENN’s securities on issue
• The deal is subject to claw-back provisions based on certain milestones, including minimum base funds management fee targets
• If the deal goes ahead, Elanor’s assets under management will increase from $3 billion to $6.4 billion
• ENN shares was up 13.5 per cent, trading at $1.68, while CGF shares dipped 0.32 per cent, trading at $6.27 at 11:00 am AEDT

Elanor Investors Group (ENN) is set to acquire Challenger’s (CGF) $3.4 billion Australian real estate funds management business for $41.8 million.

Additionally, the parties plan to establish a broader strategic partnership through the acquisition.

The consideration will see Elanor issue 27.4 million shares to Challenger, representing 18.2 per cent of ENN’s securities on issue.

The deal is subject to claw-back provisions based on certain milestones, including minimum base funds management fee targets.

If given the green light, Elanor’s assets under management would increase from $3 billion to $6.4 billion.

ENN CEO Glen Willis said the deal was a “transformational transaction” for Elanor, positioning the company for further “strong” growth and material financial year 2024 earnings accretion.

The parties also entered into a strategic partnership through which Elanor would be Challengers’ real estate funds management partner in both Australia and New Zealand.

This would see Fidante, CGF’s multi-affiliate funds management business, exclusively distribute Elanor’s real estate managed funds.

Challenger’s Managing Director and Chief Executive Officer Nick Hamilton said the partnership would provide a “significant uplift” in capability and scale.

“Elanor’s track record in originating high quality real estate opportunities, combined with Fidante’s award winning distribution capability, will allow us to meet more customer needs,” Mr Hamilton said.

The deal is expected to be complete by June 30, 2023 subject to ENN shareholder approval and other regulatory approvals.

ENN shares was up 13.5 per cent, trading at $1.68, while CGF shares dipped 0.32 per cent, trading at $6.27 at 11:00 am AEDT.