The IOOF Holdings Limited (ASX: IFL) share price was trading 8.18% higher today. Over the past month, shares of IOOF Holdings Limited have pushed 26% higher. For comparison, the S&P/ASX 200 (INDEXASX: XJO) has risen 1% in the same time.
About IOOF Holdings Limited
IOOF Holdings is a diversified financials business that offers a variety of services to clients including financial advice, platform management & administration, investment management and trustee services. IOOF has been operating since 1846 and is now one of the largest financial services businesses.
What’s Happened?
IOOF shares are trading higher today after announcing the receipt of No Objection Notices from OnePath Custodians Pty Ltd and Australia and New Zealand Banking Group (ASX: ANZ) in relation to the acquisition of the ANZ Wealth Pension and Investments (P&I) business.
IOOF and ANZ have been working on this transaction since last year, and several changes have now been made which seem to have left IOOF shareholders pleased.
The purchase price, which was originally set at $950 million, has been revised down to $825 million subject to a completion adjustment for the net assets of ANZ P&I.
The final date to terminate the transaction has been extended from 17th October 2019 to 31st December 2019, and there were some changes made to the Strategic Alliance Agreement.
IOOF CEO Renato Mota said, “The revised terms reflect both ANZ and IOOF’s commitment to completing the transaction and it delivers greater certainty to ANZ P&I members and clients”.
While the acquisition is now one step closer to completion, ANZ and IOOF are still waiting for approval from the Australian Prudential Regulation Authority (APRA).
Buy, Hold or Sell?
IOOF shares offer one of the highest fully franked dividend yields on the ASX at 6%, and, while the share price still sits far below pre-Royal Commission levels, it does seem to be recovering.
Even so, I wouldn’t put too much weight on this acquisition until APRA has actually approved it and I would feel more inclined to be buying IOOF shares for the dividends rather than capital growth.
I also think there are just better options around, like the three dividend-paying shares in the free report below.
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Disclosure: At the time of publishing, Max does not have a financial interest in any of the companies mentioned.
