Steadfast has entered into an agreement to buy the rebate rights to Insurance Brokers Network Australia, which is currently partnered with AUB Group ((AUB)). The broker calculates 2-3% accretion but suggests the medium term opportunity of an increased network could be much greater.
If the deal it goes ahead, it would mean Steadfast’s broker network would increase to more than double that of AUB, allowing the leverage of scale and further acquisitions, the broker believes. While the immediate impact on AUB is minimal, the broker notes medium term growth opportunities may also be minimal.
Neutral and $3.00 target retained for Steadfast.
Sector: Insurance.
Target price is $3.00.Current Price is $3.49. Difference: ($0.49) – (brackets indicate current price is over target). If SDF meets the Credit Suisse target it will return approximately -16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
