Superannuation administration provider OneVue has instigated a $177 million friendly takeover deal for competitor Diversa.

Shareholders will be offered either 1.2375 OneVue shares or 1.073 shares and 10 cents for each share they hold in Diversa.

The offer represents a 42% premium to Diversa’s average share price of 57 cents.

The Diversa board has recommended the takeover and will take up the offer.

Both companies run administration services, including group life cover, to a number of smaller funds.

OneVue looks after more than 87,000 super fund members, while Diversa provides administration services to five funds.

Revenue from combining the super administration businesses, including insurance premiums, would be about $10.8 billion, with more than 75 clients.

OneVue Chairman Gail Pemberton says uniting the two companies makes business sense.

“The combination of OneVue and Diversa has compelling strategic merit and is a highly complementary transaction,” she said. “It will provide benefits to shareholders, employees and customers, including significantly enhanced scale and talent.”

Under the merger, OneVue expects annual pre-tax savings of about $4 million by the end of the 2018 financial year.       

Diversa MD Vincent Parrott says the companies are familiar with each other.

“The two organisations have a strong and successful working relationship forged during the last years of working together across trustee and super services,” he said. “Culture and leadership were important factors in recommending this business partnership.”

Mr Parrott will join OneVue after the takeover, overseeing governance for super trustee services and funds management.

OneVue CEO Connie Mckeage will become Group CEO.

Diversa Chairman Ron Dewhurst will join the OneVue board as a non-executive director.

Offer documents are expected to be sent to Diversa shareholders in August, with a shareholder vote the following month.

Meanwhile, Equity Trustees has flagged possible legal action against Diversa over its role as administrator of the Progress Superannuation Fund.

Equity Trustees was trustee of the fund in 2009, and the potential claim relates to Diversa actions after it started administering the fund.

In a notice to the Australian Securities Exchange today, Diversa says the notice of claim from Equity Trustees is “vague in its terms and fails to particularise the details of the alleged action”.

Diversa says any action is unlikely to have a “material adverse effect” on its proposed merger with OneVue.