PSC Insurance: Ardonagh Offer Looks Fair and Likely to Proceed

We think it is highly likely that narrow-moat PSC Insurance will be acquired by United Kingdom-based insurance broker The Ardonagh Group, with the parties entering into a scheme implementation deed. Cash consideration of AUD 6.19 looks fair, representing a 19% premium to our stand-alone valuation of AUD 5.20 per share and 33% above PSC’s three-month volume-weighted average price to March 12, 2024—the date at which speculation of a potential takeover was first published. The deal is subject to shareholder approval, court approval, and approval from regulatory bodies, including the Foreign Investment Review Board and the Australian Competition and Consumer Commission. A scheme booklet will be sent to PSC shareholders in due course, and a vote on the scheme is expected to take place in September 2024. PSC shareholders do not need to take any action at this time.