Two AFG co-founders and directors have reduced their stake in the aggregator, selling approximately 11 million shares on the ASX.
In an update to the ASX, the Australian Finance Group (AFG) has reported that approximately 11 million shares – equivalent to a 5.1 per cent stake in the company – have been sold by entities associated with AFG directors and co-founders Brett McKeon and Malcolm Watkins.
Based on AFG’s share price as at 27 November ($2.42 per share), the shares are estimated to be worth over $26.6 million.
Of the 11 million shares offloaded by the co-founders, 6 million belonged to Mr McKeon, while 5 million belonged to Mr Watkins.
Despite the selldown, both directors will remain substantial shareholders, holding more than 30 million shares between them.
According to AFG, the selldown has been conducted to assist both directors to “diversify their portfolios” and is the first “meaningful sell down” conducted by the pair since AFG’s initial public offering (IPO) in 2015.
AFG added that the directors have no plans to sell more of their stake in the near future.
“The directors remain committed to their roles at AFG and continue to be substantially invested in the long-term performance of the business with no intention to reduce their holdings further in the medium term,” AFG noted.
The ASX update noted that the 11 million shares offloaded by the directors were bought up by “a range of institutions”, with the transaction overseen by Macquarie Securities.
This follows last week’s news of the sale of shares from investors affiliated with the Commonwealth Bank of Australia (CBA).
CBA’s holdings in AFG decreased from a total of over 16.5 million shares to just under 13.8 million, reducing CBA’s stake in AFG from a total of 7.65 per cent to 6.4 per cent.
AFG is currently in the process of merging with peer group Connective, in a deal worth approximately $120 million.
As part of the transaction, Connective will receive $60 million in cash and 30,886,441 AFG shares.
However, the transaction is conditional upon court approval as well as approval from shareholders, the Australian Competition and Consumer Commission (ACCC), and other relevant parties.
In an address to shareholders at the group’s annual general meeting, AFG chief executive David Bailey revealed that the proposed merger has been delayed.
According to the AFG CEO, the court proceedings have progressed “at a slower pace than originally anticipated”.
As a result, a final decision from the Federal Court is now not expected until the 2021 financial year, rather than 2H20 as originally reported.
Meanwhile, the ACCC is expected to make its determination in late January 2020, after reviewing submissions from stakeholders.
[Related: AFG, Connective merger delayed]
Charbel Kadib is the news editor on The Adviser and Mortgage Business.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.
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