Christine Christian

Bell Financial Group Ltd (BFG), a diversified financial services business, has made a non-binding proposal to the board of SelfWealth Ltd (ASX: SWF) to acquire 100% of SelfWealth for $0.22 per share through a scheme of arrangement, valuing SelfWealth at approximately $51 million.

The SelfWealth board has agreed to progress negotiations with BFG on an exclusive basis and intends to unanimously recommend that shareholders vote in favor of the proposal, in the absence of a superior offer.

The proposal offers a significant premium to recent trading prices of SWF shares. BFG shareholders are expected to benefit from increased scale in the online broking business, cost synergies, and material earnings per share accretion post-integration. The acquisition will add approximately 130,000 active portfolios to BFG’s holdings, increasing sponsored holdings by $11 billion to $94 billion.

Integration is expected to cause minimal disruption due to similarities between the two businesses.

BFG Chair Brian Wilson AO commented: “We are excited by the prospect of welcoming SelfWealth’s clients and team to Bell. Clients will benefit from a superior user experience and access to a broader array of products and services within BFG.”

SelfWealth Chair Christine Christian AO added: “The BFG proposal is compelling for SelfWealth’s shareholders, team members, and clients. It provides an attractive cash price and the opportunity to share in potential synergies for those electing to receive BFG shares. We also believe clients will benefit from BFG’s diversified wealth management offerings.”

The proposal includes a scrip alternative allowing SWF shareholders to opt for BFG shares instead of cash. Conditions include:

• The SelfWealth board’s unanimous recommendation, subject to no superior proposal.
• Shareholder and court approvals.
• No material adverse changes to the business.
• Cancellation of all existing SWF performance rights on acceptable terms.

BFG and SelfWealth have signed an Exclusivity Deed granting BFG exclusive negotiation rights for three weeks, with an optional one-week extension. The deed includes customary restrictions such as no shop, no talk (with a fiduciary exception), and notification obligations.

The proposal remains non-binding and subject to agreement on binding terms and approvals. There is no certainty the transaction will proceed. BFG will update the market as required.

BFG has engaged Ashurst as legal adviser.

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Craig Keary

SelfWealth Ltd (ASX: SWF) (“Selfwealth” or “the Company”), leading Australian fixed-cost low-cost broker, has announced its half year financial results for the six months ended 31 December 2023 (‘H1 24’).

Selfwealth achieved continued profitability, after its maiden profit in FY23, with Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $3.5 million, up 45% from $2.4 million in the previous corresponding period (pcp) and Net Profit After Tax (NPAT) of $1.6 million, compared to $0.1 million pcp.

Commenting on the result, Selfwealth’s Chair Christine Christian AO said “As we reported last August, FY23 was a year of turnaround and change for Selfwealth and it is pleasing to see that because of this action, the positive momentum in profitability has continued. And importantly, we have now achieved five consecutive quarters of positive cashflow and reduced our operating cost base by 20.7%2.

“These results are testament to the focus and drive of the renewed Board and Selfwealth team.

“During the period, we appointed a new CEO and continued our Board renewal with the appointment to the Board in November 2023 of Adam Lewis, ex-partner of McKinsey & Company.

“Craig Keary, a highly experienced financial services leader, was appointed CEO in October 2023, and has quickly brought together a new Leadership team. The new team are highly experienced industry executives and have the expertise and know-how Selfwealth needs to scale the business for long-term, sustainable growth.”

Selfwealth experienced a surge in new customers and trading activity during the COVID-19 pandemic years, particularly in FY21 and FY22. It is pleasing to note that the Company has been able to successfully retain its loyal customer base in a time of intense market competition. While active trader numbers have remained steady, the composition of high value customers has increased compared to last year.

The transformation program currently underway focuses on platform review and optimisation, a streamlining of operations to increase efficiencies, as well as measures to reduce cost-to-serve.

Craig Keary, Selfwealth’s Chief Executive Officer, commented “Since taking on the role of CEO, I have been working with the Board and the Executive team to deliver on the transformation program in order to be fit for purpose and scale the business so it is well positioned for growth.

“Growing profitably and maintaining the strong financial position of the company is fundamental to our long-term strategy, as is retaining our loyal active traders and focussing on the development of High-Net-Worth traders, particularly through our efforts in developing an elevated customer experience.

“We have been ‘right-sizing’ the business to do this, and it is pleasing that during the last half, we have reduced our operating cost base by 20.7%.

“Selfwealth is focusing on its core business activities, including supporting our strong customer base and particularly, attracting and retaining High Net Worth customers. As well, we are actively seeking out opportunities for diversification to support growth through market cycles and changing customer preferences.”

While the period saw subdued trading conditions with the ASX market trading volumes down compared to pcp, January saw a noticeable uptick.

Keary said “Selfwealth’s recent performance combined with the leadership and operational changes made over the last half have delivered a stronger and more focussed business. This will support the company to take further advantage of its competitive position as a leading retail, ‘fixed-cost, low-cost’ broker with a trusted brand.

“Together with the new leadership team, I look forward to better serving our clients and taking advantage of the potential market and industry opportunities that the prevailing environment presents.”

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