Pepper Money (PPM AU)'s Board Should Accept The New Reality

• Back on the 9th Feb, leading non-bank lender Pepper Money (PPM AU) confirmed KKR and Challenger Ltd (CGF AU) had submitted an NBIO by way of a Scheme.

• KKR/CGF offered A$2.60/share, a 47.7% premium to undisturbed, and ~1.49x P/B (based on 1H25 numbers). KKR currently holds 60.34%.

• Domestic peers are down 11% since the NBIO was announced. Global peers are down even more. KKR/CGR have reduced the NBIO by 13.5% to $2.25/share (including dividends). Best & final.

Pepper Money is not very liquid - look away now if this is not your thing.

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The Trade:

• Trading at gross spread of 17%.

• This is the only Offer on the table.

• Pepper Money’s board should swallow their pride and let minority shareholders decide whether the revised terms are fair amid expected inflationary implications from the Middle East conflict.

• I’d be getting some exposure here.