Australia's Challenger tumbles after key shareholder cuts stake (updated)

Challenger

05/09/2024 07:44

(Updates with closing price, adds analyst comment in paragraphs
5-6)
    By Echha Jain
       Sept 5 (Reuters) - Shares of Australia's Challenger
 CGF.AX  closed 11% lower on Thursday after a key shareholder
more than halved its stake in the investment management firm.
    The stock declined as much as 14.4% to A$5.995, posting its
biggest intraday drop since August 2022 and hitting the lowest
level since December 2023. It was one of the top losers on the
benchmark ASX 200 index  .AXJO , which ended 0.4% higher. 
    Trading volume soared with nearly 47.3 million Challenger
shares changing hands, compared with the 30-day average of about
1.4 million shares.
    Challenger said U.S.-listed Apollo Global Management  APO.N 
reduced its shareholding in the company to 9.9% from 20.1% to
support "redeployment of capital to other growth opportunities".
    Morningstar equity analyst Shaun Ler believes Apollo cut its
stake because it found a more lucrative opportunity than
annuities for Challenger, which is notably capital-intensive.
    Considering Apollo's previous significant ownership, the
reduced stake may allow the Challenger board and team more
freedom to make independent decisions, Ler added.
    Challenger and Apollo remain committed to pursuing a range
of initiatives, including an asset origination and distribution
partnership, Challenger said in its statement.
    

 (Reporting by Echha Jain in Bengaluru; Editing by Rashmi Aich
and Subhranshu Sahu)
 ((Echha.Jain@thomsonreuters.com;))