Challenger has rejected a buyout proposal from Daiichi Life Group, saying the $11.80-per-stock offer “is not at a level it could recommend to shareholders”.

However, the Australian wealth manager has not closed the door on a takeover, saying it “intends to engage” further with the Japanese life insurer.

Daiichi is a shareholder in Challenger via its Australian subsidiary TAL Daiichi Life. It was bidding to acquire the remaining 79.5% of stock in a deal worth about $7.94 billion.

“The board ... has met and carefully considered the offer, having regard to Challenger’s value and prospects,” Challenger said today in a statement to the Australian Securities Exchange.

“Challenger highly values [TAL Daiichi Australia] as its largest shareholder and a commercial partner, and the board intends to engage with TDA to see whether a proposal can be reached that the board could recommend.

“There is no certainty that the proposal will result in a binding offer or that any transaction will eventuate.”

TAL has declined to comment on Challenger’s decision.