Calliden says net profit grew 37% to $2.8 million in the first half, ahead of a shareholder vote on a takeover bid from Steadfast.

The board-backed 46.5 cents per share offer includes 41.5 cents in cash and a five cent fully franked dividend, valuing the company at about $105 million.

“We have made our recommendation, we have brought the deal to the table and now it is up to shareholders,” CEO Nick Kirk told a briefing.

The board’s support is conditional on a favourable independent expert’s report.

Shareholders will meet in November to vote on the proposal, with support from 75% of shares by value required for it to succeed. Large shareholders include Australian Unity.

The bid follows Calliden’s expansion in the agency business as it moves to cut earnings volatility and reduce its role as a general insurer. Steadfast plans to acquire the whole company and sell on the insurance part to Munich Re.

Calliden agency profit more than doubled to $4.4 million in the first half, while insurance division earnings fell to $800,000 from $2.9 million in the corresponding period last year.

Joint venture earnings were $500,000, up from $100,000.

“Our new business model has allowed us to take out much of the volatility in our earnings,” CFO Anthony Dijanosic said.

Munich Re, Ace and the NSW Self Insurance Corporation now underwrite more than half of Calliden’s gross written premium. The group forecasts a full-year net profit of $7.5-9.5 million, subject to catastrophe and claims experience.