Challenger shares have soared as the Australian wealth manager says it is assessing a buyout proposal from Daiichi Life Group.

Japanese life insurer Daiichi is a minority shareholder through subsidiary TAL Daiichi Life Australia and has made an $11.80-per-stock offer via a scheme of arrangement to acquire the remaining 79.5% holding.

“The proposal is subject to a number of conditions including satisfactory completion of due diligence, entry into a scheme implementation agreement on acceptable terms and approval from various regulatory bodies, and board recommendation,” Challenger said in a statement to the Australian Securities Exchange this morning.

“The board … is considering the indicative offer … and there is no certainty the proposal will result in a binding offer or that any transaction will eventuate. Challenger will continue to keep the market informed in accordance with its continuous disclosure obligations.”

Daiichi’s takeover offer values Challenger at about $7.94 billion and the $11.80 proposal represents a 17.7% premium to the wealth manager’s one-month volume weighted average price of $10.03.

Shares in the wealth manager reached $11.65 at one point today, up 18% from Friday’s close of $9.85.

Challenger also provided an update on its first-quarter trading performance in a separate statement to the ASX.

CEO Nick Hamilton says the business started the year strongly, with continued momentum across its retirement business, driven by growing customer demand, new distribution channels and implementation of growth plan.

“Sales momentum was strong across both domestic and offshore annuities, supported by demand for guaranteed income solutions in Australia and Japan,” he said.

“Our strategy has seen us expand the channels across which we distribute, enlarging our addressable market and supporting faster growth.”