Get ready for a public shootout at in-play online retail broker...

Get ready for a public shootout at in-play online retail broker Selfwealth.

Last Thursday, AxiCorp Financial Services (AxiCorp) put in a competing non-binding offer to acquire 100 per cent of the shares in the ASX-listed company at 23¢ cash per share via a scheme of arrangement. This fell a day after Bell Financial Group’s 22¢ cash per share NBIO, with a scrip alternative, was made public.

Bell Financial Group and AxiCorp Financial Services have both tabled an offer for online broker Selfwealth. Tamara VoninskiOn the face of it, Bells is in a better position having entered into a 21-day exclusivity deed and negotiation with Selfwealth. However, investor sources told this column that AxiCorp– the biggest broker you’ve never heard of and which has lobbed multiple offers at the Selfwealth board over the past few months but received the cold shoulder – has been denied access to due diligence or friendly negotiation.

Street Talk understands AxiCorp’s chief executive is gung ho about Selfwealth and won’t give up without a fight. If Bell bids higher, AxiCorp will bid higher again. As such, it’s worth asking whether Bells and the Christine Christian-chaired Selfwealth board have nutted out a sweetheart deal – from one AO to another.

Still, the board has extracted value for shareholders since the broker was last in play, gathering two bids at significant premiums to the on-market price – or around $400 per active trader. A spokesperson from Selfwealth declined to comment when contacted by Street Talk on Tuesday.

Selfwealth chair Christine Christian was appointed to the board in April 2023. NineBells has a good argument to make about potential synergies and cost savings between the two businesses but on a purely financial basis, AxiCorp has more firepower. The privately owned global online broker, which focuses on forex trading and contracts for difference, turns over $350 million in revenue and $80 million EBITDA. Bells last reported $247 million revenue and $64.5 million EBITDA in financial year 2023.

Street Talk understands AxiCorp’s funding is ready to go.SelfWealth is advised by Flagstaff Partners and Herbert Smith Freehills. Its announcement of the AxiCorp bid didn’t include any reference to whether the board considered its bid to be superior but, self-evidently, it is.AxiCorp has former Credit Suisse veteran James Disney and DLA Piper in its corner. Its non-binding offer is not subject to due diligence or any financing conditions.

Selfwealth is no stranger to takeover interest. Stake, an online stockbroking platform chaired by former Perpetual chief executive Geoff Lloyd, tabled a 17.5¢ per share takeover bid for Selfwealth last year that was ultimately unsuccessful. This came as Selfwealth’s stock price was under considerable pressure and its maiden profit driven by interest income on client cash balances which have been declining alongside rising interest rates as customers seek higher cash returns. After Cath Whitaker’s sudden exit, the then $35.3 million market cap broker was also without a permanent chief executive. Its board had also rotated following the exits of Rob Edgley, Huy Truong, Jodie Leonard, John O’Shaughnessy and Tam Vu.

Selfwealth also explored merger talks with equities trading and wholesale clearing platform Openmarkets in 2022 which ultimately fizzled out.The company’s major shareholders include Melbourne-based fund manager Datt Capital and tech entrepreneur Lee Gaywood, and following the bid, M&A arbitrage fund Harvest Lane. Datt’s Emanuel Ajay Datt also sits on the Selfwealth board alongside former head of capital and debt advisory at Ernst & Young Paul Clark and former McKinsey & Company partner Adam Lewis.