AUB Group says it will not go ahead with the planned $140 million acquisition of Adelaide-based MGA Whittles at this stage and will defer payment of the interim dividend due to uncertainty around the impact of the coronavirus outbreak.

CEO Mike Emmett says AUB and MGA Whittles have jointly agreed to put the deal on hold given the current rapid pace of change.

“No-one can predict what the next six months will look like and given that, you become conservative,” he told insuranceNEWS.com.au.

The suspension of the deal and the decision to defer until September 3 the interim dividend of 14.5 cents per share, totalling $10.7 million, reflects precautionary measures to conserve liquidity, he says.

AUB, which currently has a 49.9% shareholding in MGA, said on February 17 that it planned to acquire the remaining 50.1%, as well as 100% of strata specialist Whittles.

As reported in a Breaking News bulletin earlier today, the revised decision means AUB will not pay the proposed cash amount of $29.1 million or make the proposed share issue and will not be required to repay the existing debt facilities of MGA Whittles.

“The parties intend to revisit the proposal as soon as practicable and remain firmly committed to the existing partnership in the interim,” AUB says in a COVID-19 update to the Australian Securities Exchange this morning.

The broking group today also says it is withdrawing its earning guidance given the evolving coronavirus situation.

AUB last month completed the $132 million acquisition of a 40% stake in online distribution platform BizCover. The transaction was announced at the same time as the MGA Whittles deal.