The proposed offer of A$11.80 per share represents a 20% premium over Challenger's closing price on Friday. Following the announcement, the stock rallied 18% to reach A$11.58 in early trading, marking its strongest performance in over five years.

Alongside the acquisition news, Challenger reported a 5% increase in assets under management during the September quarter, bringing the total to A$31.9 billion. The board is currently evaluating the proposal from its long-term partner, which seeks to consolidate its control over the Sydney-based financial services provider.