Updated: 2 December 2025
Key points
- AUB Group Limited (ASX:AUB) shares fell about 17–18% on Monday after private‑equity bidders EQT and CVC walked away from a proposed A$45 per share takeover. [1]
- The stock closed at A$30.63 on 1 December and was trading around A$31.30–31.35 on 2 December as bargain hunters stepped in. [2]
- AUB’s board still says A$45 “appropriately” values the business and has reaffirmed FY26 underlying NPAT guidance of A$215–227 million (up from A$200.2m in FY25). [3]
- Fundamentals remain strong after a “pivotal year”: FY25 revenue grew ~12.7% to about A$1.5bn, underlying NPAT rose 17.1% to A$200.2m, and the full‑year dividend increased 15.2% to 91c per share. [4]
- Most brokers still rate AUB a Buy with 12‑month price targets clustered around A$40–43, implying substantial upside from current levels, though some analysts are warning that the insurance cycle may be past its peak. [5]
What just happened to AUB Group’s share price?
AUB Group Limited, a major insurance broking and underwriting group in the S&P/ASX 200, has just experienced one of its sharpest single‑day falls on record.
On 1 December 2025, AUB announced that the private‑equity consortium led by EQT AB and CVC Asia Pacific would not proceed with a previously flagged A$45 per share takeover proposal valuing the company at around A$5.25 billion. [6]
The result:
- The AUB share price plunged about 17–18% intraday to the low A$30s, dragging on the ASX 200 and becoming one of the index’s biggest losers. [7]
- According to multiple market recaps, AUB’s fall was the steepest on the Australian market on the day, overshadowing moves in other financials and brokers. [8]
By 2 December 2025, some of that shock had begun to fade:
- Intelligent Investor data showed AUB trading around A$31.29, up about 2.15% on the day. [9]
- A Motley Fool Australia market wrap noted the AUB share price was “up almost 2.5% to A$31.35” as investors bought the post‑takeover dip. [10]
For context, AUB’s 52‑week range is about A$27.21–40.28, and its market capitalisation at current levels is roughly A$3.6 billion. [11]
How the EQT–CVC takeover saga unfolded
The private‑equity interest in AUB has been intense and relatively short‑lived.
- Mid‑September 2025 – EQT approached AUB with a non‑binding, indicative offer at A$43 per share, later lifting this to A$45 per share. At that time AUB had been trading around A$32, so the bid implied a hefty premium. [12]
- AUB granted EQT exclusive due diligence and later allowed the firm to form a consortium with CVC, extending exclusivity as deal documentation progressed. [13]
- The proposed deal would have valued AUB at more than A$5 billion, effectively taking the company private at a price the board considered reflective of its “current market value”. [14]
On 1 December, AUB told the market that:
- The consortium had advised it would not proceed with a binding proposal at A$45 per share.
- Discussions were terminated by mutual agreement.
- The board nonetheless reiterated that A$45 “appropriately” values the company in today’s conditions. [15]
Industry and specialist outlets such as Insurance Business, Reinsurance News, Insurance Asia and Reuters all highlighted that the decision came after more than a month of detailed due diligence, and that AUB will now continue as an independent listed broker and underwriting group. [16]
AUB Group’s fundamentals: a “pivotal year” in FY25
The collapse of the bid came after a strong financial year for AUB.
According to the company’s FY25 results and subsequent commentary:
- Underlying NPAT (net profit after tax) rose 17.1% to about A$200.2m. [17]
- Revenue grew 12.7% to around A$1.5bn, with gross written premium (GWP) hitting roughly A$11bn. [18]
- The Australian broking division lifted profit by more than 12% to about A$135.6m, while New Zealand broking saw more modest growth to roughly A$23m. [19]
- The underwriting agencies division – including UK wholesale broker Tysers – boosted pre‑tax profit by around 30% to about A$72m, helped by ~25% revenue growth and margin expansion north of 44%. [20]
- BizCover, AUB’s SME‑focused online platform, grew revenue by about 15% to exceed A$100m. [21]
- The full‑year dividend rose 15.2% to A$0.91 per share (including a 66c fully‑franked final dividend), implying a payout ratio in the mid‑50% range. [22]
Third‑party data providers show AUB generating healthy margins and cash flow:
- Trailing net profit margin around 15%, with operating margins in the mid‑20s. [23]
- Free cash flow of about A$382m over the last twelve months, implying a double‑digit FCF yield at current market value. [24]
- Net debt of roughly A$679m, with a leverage ratio just under 2x and about A$375m of cash and undrawn debt facilities at 30 June 2025. [25]
On its own numbers, AUB describes FY25 as a “pivotal year” marked by international expansion, acquisitions and “solid financial results” across all divisions. [26]
Outlook and guidance: management still aiming higher
Crucially for long‑term investors, AUB has reaffirmed its FY26 earnings guidance despite the failed takeover.
The company is guiding to:
- FY26 underlying NPAT of A$215–227m, which represents 7.4–13.4% growth over FY25. [27]
CEO Michael Emmett and the board have stressed that:
- The intense due diligence process “reaffirmed” management’s confidence in AUB’s strategy and long‑term growth prospects. [28]
- The focus will now be on organic initiatives and bolt‑on acquisitions across broking, underwriting agencies and digital platforms like BizCover. [29]
Given AUB’s position as an ASX200‑listed network of retail and wholesale brokers and underwriting agencies operating from roughly 579 locations with more than 6,000 staff and about 1 million clients, the growth story is still intimately tied to broader insurance demand and premium trends in Australia, New Zealand and the UK. [30]
What analysts and commentators are saying on 2 December 2025
Morningstar: “Shares are materially undervalued”
In a detailed note titled “Is AUB an opportunity after shares plunge 17%?” published on 2 December 2025, Morningstar senior analyst Nathan Zaia argues that: [31]
- With the takeover probability removed, they have reverted to a stand‑alone fair value estimate of A$37.50 per share, down from A$43 when a 75% chance of the bid completing was assumed.
- At prices around A$31, Morningstar believes AUB shares are “materially undervalued” relative to that fair value.
- AUB is rated as a “narrow‑moat” business, benefiting from scale advantages, better policy terms for clients and the ability to invest more heavily in technology and analytics than smaller brokers.
- The medium‑term outlook includes further insurance price rises, ongoing market‑share gains for intermediated brokers, and long‑term earnings benefits from the Tysers acquisition and digital platform BizCover.
Zaia’s bottom line: the failed takeover does not mean due diligence unearthed red flags; instead, shareholders may simply have to wait longer for the earnings growth that originally attracted private equity interest.
IG and sector bears: “Insurance may have peaked”
CFD provider IG highlighted AUB as its “Stock of the Day” following the sell‑off, noting that: [32]
- AUB shares fell around 16%, effectively wiping out the takeover premium.
- The company has reaffirmed its A$215m NPAT guidance and now emphasises organic growth and future acquisitions.
- Some analysts worry the multi‑year tailwind from higher premiums and yields could be fading, warning that falling bond yields and weaker global growth may compress margins across the insurance sector.
- IG’s commentary leans toward caution, suggesting that investors who rode the stock up on bid speculation might consider taking profits and reallocating capital.
Other commentary: buy‑the‑dip vs “wait and see”
Recent coverage from various outlets reinforces that sentiment is split:
- A Reuters market recap quoted a strategist arguing that despite the failed takeover, fundamentals remain intact, the sector remains attractive, and the sell‑off “gives retail investors a chance to buy the dip”, while also opening the door for potential rival bidders. [33]
- A feature in Insurance Business stresses AUB’s double‑digit profit growth, the strength of the agencies division and digital platform BizCover, and notes that the board’s insistence on A$45 per share may keep strategic interest alive if earnings continue to meet upgraded guidance. [34]
- Meyka and other AI‑driven platforms frame the event as a risk‑off shock that hit financials and brokers broadly, arguing that future takeovers are “possible but not guaranteed”, and that AUB must continue to deliver on premium growth, margins and broker retention to tempt new suitors. [35]
- The Australian’s DataRoom column reports that broker Jarden still sees AUB as undervalued, with a target price of around A$37.80 at a share price of A$30.63, and expects M&A in the broker sector to remain robust despite the collapsed deal. [36]
Valuation check: where AUB trades now vs targets and peers
At roughly A$31–32 per share, where does AUB now sit on the valuation spectrum?
Earnings multiples and yield
Fresh metrics from Google Finance and other data providers indicate that at recent prices AUB trades on roughly: [37]
- P/E (trailing): about 20x earnings.
- Dividend yield: roughly 2.8–3.0%, based on a full‑year dividend near A$0.91 per share.
- Price‑to‑book: just over 2x, given book value per share around A$14.5.
- Free‑cash‑flow yield: around 10%, reflecting strong cash generation relative to market cap.
Before the sell‑off, sources like Stocksguide and GuruFocus pegged AUB’s P/E in the mid‑20s and forward P/E around 19x, so the post‑bid tumble has pulled the multiple back toward the high‑teens to low‑20s range based on the same earnings. [38]
Morningstar notes that rival broker Steadfast has recently traded on a lower forward P/E than AUB, but with the takeover premium now gone, the valuation gap has narrowed and may even invert, depending on how the next few sessions unfold. [39]
Analyst forecasts and price targets
Consensus forecasts remain broadly constructive:
- TipRanks cites 5 analysts with an average 12‑month price target of ~A$39.9 (range A$35.6–42.3). [40]
- Moomoo reports an average target of A$42.3, with a high estimate of A$45. [41]
- Investing.com aggregates 9 analysts with an average target around A$42.3 (high A$45, low ~A$35.5) and a consensus “Buy” rating, with the majority of brokers recommending accumulate rather than sell. [42]
- Fintel shows a slightly higher average target of about A$43.3, with the most optimistic forecasts near A$47.25. [43]
- Simply Wall St summarises the current consensus at about A$39.75, implying roughly 30% upside from a share price around A$30.6–31.0 before today’s modest bounce. [44]
These targets were mostly set before or just as the takeover collapsed, so some may be revised in coming weeks. But taken together, they suggest that sell‑side analysts still see upside from current levels, assuming AUB can deliver on its FY26 guidance.
Key risks and what to watch next
Despite strong fundamentals, there are clear risks on the radar:
- Insurance cycle risk – If insurance premium growth slows faster than expected, or reinsurance pricing eases, brokers’ revenue and margin tailwinds could weaken. Several commentators (including IG) warn the sector may have already seen its best phase of this cycle. [45]
- Macro and yield sensitivity – Falling interest rates and slower global growth could pressure investment income and client activity, affecting earnings across insurance markets. [46]
- Execution and integration – AUB’s growth strategy relies on ongoing acquisitions (for example, Tysers and multiple smaller bolt‑ons) and technology investments like BizCover. Poor execution or integration missteps could dilute returns. [47]
- No takeover floor – With the A$45 cash bid gone, there is no immediate control premium supporting the share price. Future offers are possible but speculative; Meyka rightly notes that any new bidders will want to see continued delivery on earnings and margins. [48]
For investors following AUB over the next few quarters, the most important datapoints will likely be:
- Whether FY26 NPAT tracks within the A$215–227m range. [49]
- Ongoing organic growth in Australian and New Zealand broking. [50]
- Progress on Tysers synergies and digital platforms such as BizCover. [51]
- Any signs of fresh strategic interest or sector consolidation, given the active M&A backdrop in insurance broking. [52]
AUB Group stock: where things stand on 2 December 2025
Putting it all together:
- The bid is gone, and with it the immediate path to A$45 per share.
- Fundamentals look solid, with strong FY25 growth, high‑margin divisions, robust cash generation and upgraded guidance for FY26. [53]
- Valuation has reset from a takeover‑premium multiple to something closer to the broader market, while most analyst targets still sit well above the current share price. [54]
- Opinion is split: some analysts see a textbook “buy‑the‑dip” opportunity in a quality franchise; others are wary of cycle risk and recommend caution after a multi‑year run‑up in insurance pricing.
References
1. www.reuters.com, 2. www.google.com, 3. www.insurancebusinessmag.com, 4. www.aubgroup.com.au, 5. www.tipranks.com, 6. www.reuters.com, 7. www.reuters.com, 8. m.economictimes.com, 9. www.intelligentinvestor.com.au, 10. www.fool.com.au, 11. www.google.com, 12. www.insurancebusinessmag.com, 13. www.insurancebusinessmag.com, 14. www.reuters.com, 15. www.insurancebusinessmag.com, 16. www.insurancebusinessmag.com, 17. www.listcorp.com, 18. www.aubgroup.com.au, 19. www.aubgroup.com.au, 20. www.aubgroup.com.au, 21. www.aubgroup.com.au, 22. www.aubgroup.com.au, 23. stockanalysis.com, 24. stockanalysis.com, 25. www.aubgroup.com.au, 26. www.aubgroup.com.au, 27. www.aubgroup.com.au, 28. www.reinsurancene.ws, 29. www.insurancebusinessmag.com, 30. www.aubgroup.com.au, 31. www.morningstar.com.au, 32. www.ig.com, 33. www.reuters.com, 34. www.insurancebusinessmag.com, 35. meyka.com, 36. www.theaustralian.com.au, 37. www.google.com, 38. stocksguide.com, 39. www.morningstar.com.au, 40. www.tipranks.com, 41. www.moomoo.com, 42. www.investing.com, 43. fintel.io, 44. simplywall.st, 45. www.ig.com, 46. www.ig.com, 47. www.aubgroup.com.au, 48. meyka.com, 49. www.aubgroup.com.au, 50. www.aubgroup.com.au, 51. www.aubgroup.com.au, 52. www.theaustralian.com.au, 53. www.aubgroup.com.au, 54. www.google.com
