Apollo Block Trade in Challenger
Jarden acted as Joint Lead Manager and Underwriter on Apollo's A$460 million block trade in Challenger.
Expertise
Managing large-scale equity sell-downs, executing block trades at tight discounts and demonstrating leadership in generating demand from institutional investors.
Strategic Context
On 4 September 2024, Apollo completed a A$460 million block trade, divesting approximately 70.6 million fully paid ordinary shares (~10.2% of issued capital) in Challenger (CGF.ASX). The key transaction details were:
- Offer price: A$6.51 per security, representing a 7.0% discount to last close of A$7.00 and a 6.5% discount to 5-day VWAP.
- Highly liquid execution: The trade represented approximately 43x the 3-month average daily trading volume (ADTV).
- Strategic rationale: Apollo intended to use proceeds from the sale to support redeployment of capital to other growth opportunities while maintaining their strategic partnership with Challenger.
This transaction enabled Apollo to maintain a significant stake in Challenger (reduced from ~20.12% to ~9.9% post-transaction) while freeing up capital for new investments.
Execution
Jarden acted as Joint Lead Manager and Underwriter, facilitating an efficient block trade. Key execution highlights included:
- Fully underwritten execution at a tight discount without an investor sounding process, showcasing Jarden's risk appetite.
- Leveraged strong FY24 results to drive demand and launch the block with momentum despite a challenging market backdrop.
- Management of joint CGF/Apollo messaging regarding the block sell-down and enduring strength of strategic relationship post sell-down.
- Generated approximately 70% of demand from cornerstone/long-only accounts, demonstrating Jarden's strong access to institutional investors.
Despite challenging market conditions (ASX200 up 1.9%, NASDAQ up 3.3%) on the day of launch, Jarden was able to successfully execute the Apollo block trade.
Outcome
The A$460 million block trade successfully:
- Achieved accelerated ~10% free float impact for Challenger, triggering approximately $550 million in passive buying.
- Secured strong coverage by high-quality new and existing investors.
- Delivered strong performance with CGF rallying +2.7% in days prior to launch.
- Demonstrated strong leadership from Jarden in attracting marquee A/NZ long-only investors.
Post-transaction, Challenger and Apollo remain committed to pursuing a range of initiatives as part of their ongoing commercial partnership, including an asset origination and distribution partnership.
This transaction underscores Jarden's expertise in managing significant equity block trades while ensuring minimal market disruption and maintaining strategic relationships between key stakeholders.
