The OneVue Holdings Ltd (ASX: OVH) share price is flying higher this morning, up by as much as 60.42% on the back of a takeover deal by Iress Ltd (ASX: IRE).

OneVue is a provider of superannuation, funds management and investment solutions, supporting financial services by providing technology and service solutions to its clients. It competes with larger ASX players Netwealth Group Ltd (ASX: NWL) and Praemium Ltd (ASX: PSS) in the independent specialist platform space.

Why the OneVue share price is skyrocketing

This morning, OneVue announced it has entered into a binding scheme implementation agreement with Iress at 40 cents cash per share. This represents a 66.7% premium to OneVue’s last closing price of 24 cents on Thursday.

The agreement remains subject to certain conditions, including an independent expert concluding that the scheme is in the best interest of OneVue shareholders, an ACCC statement that it does not oppose the scheme, and approval by the court.

The OneVue board unanimously recommends that shareholders vote in favour of the scheme if these conditions are satisfied.

Subject to ASIC registration and court approval, the scheme booklet is expected to be distributed to OneVue shareholders in early August 2020. Following this, shareholders will meet to vote on the scheme in early September 2020.

Commenting on the takeover, OneVue managing director Connie Mckeage said:

“We are pleased to have entered into an agreement with Iress to acquire OneVue. The offer represents a significant premium to our current share price and a full cash offer provides compelling certainty for our shareholders. Iress is a company we have significant respect for and we know they are committed to delivering high levels of service to our clients and are looking forward to working more closely alongside our clients and partners.”

Connie Mckeage will play an important role during the transition period and will consult Iress on growth, strategy, and clients after completion.

Why Iress is acquiring OneVue

Explaining the strategic rationale behind the acquisition, Iress chief executive Andrew Walsh said:

“The combination of OneVue’s strength and position in administration of managed funds, superannuation, and investments, with Iress’ strength in software and data will drive innovation through technology. This includes the development of software and services that brings advice and investments closer together, resulting in greater efficiency and productivity for professional advisers and businesses in Australia.”

Iress also announced an equity raising this morning to strengthen its balance sheet and partly fund the $107 million OneVue acquisition.

This will consist of a fully underwritten placement of $150 million to institutional and sophisticated investors, as well as a non-underwritten share purchase plan to raise approximately $20 million. The placement will be conducted at $10.42 per share, representing a 7% discount to Iress’ last closing price of $11.21 on Friday.

More reading

• In a post-COVID world, could Australia be the next superpower?

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The Afterpay Ltd (ASX: APT) share price has been a hot commodity in 2020. In fact, shares in the buy-now-pay-later leader surged 51.96% last month as investors scrambled to buy in while the S&P/ASX 200 Index (ASX: XJO) jumped 4.22% higher.

Why did the Afterpay share price surge 50% higher in May?

The company announced it reached 5 million active customers in the USA during May. Afterpay now has nearly 9 million customers in the US with a 30-40% increase in the weekly run rate from January and February. 

More than 15,000 brands now offer, or are in the process of offering, Afterpay to their customers. Afterpay also reported 15 million app and site visits in April 2020 which was good news for shareholders and the company’s share price.

The positive update was just one factor pushing the group’s shares higher. Chinese internet giant Tencent Holdings purchased a 5% stake in the Aussie company for $300 million. This could provide an opening to the lucrative Chinese market for Afterpay in the years ahead.

These were just a couple of the catalysts pushing Afterpay’s value past $12 billion. I also think momentum was a huge contributing factor following on from the strong surge its share price enjoyed in April 2020.

This momentum helped push the Afterpay share price to a new all-time high of $50.01 in May before it closed the month at $47.41 per share. If the strong growth continues in 2020, I can see Afterpay climbing inside the ASX 50 before the year is out.

Should you buy into Afterpay?

It’s hard to bet against an ASX 200 share that is up 435% since 23 March. However, the Afterpay share price is hot property right now and I think it could be dislocated from fundamentals.

This means I see Afterpay as a speculative buy. It could provide great growth potential and be a strong share to buy in 2020. However, there is still competition and regulatory risk that threaten Afterpay’s potential growth.

More reading

• 3 best stocks for ASX 200 investors in retirement to buy now
• Why these 3 ASX 200 blue chips could be set for growth this week
• Why the price of these ASX travel shares soared over 30% since mid-May
• 3 top ASX dividend shares to buy now
• 3 ASX 200 shares to watch this week

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) investors in retirement will likely need dividend income to live off. Along with this, a priority should be protecting capital and de-risking your portfolio. However, it is important not to lose sight of the magical power of compounding at high rates of return. In my opinion, all ASX investors should target the maximum total return they can achieve for their risk profile.

Investors in retirement

As investors, we’re a motley crew. We all have motley goals, motley resources and motley risk appetite. Because of this, it is important to understand your own personal circumstances and invest accordingly. The below ASX stocks will be fantastic options for most investors in retirement, but not for all. 

I am a big fan of writing everything down so that you can refer back to your notes. Take the time to think about what you want to achieve by investing in ASX stocks. It will be much clearer if the following stocks are for you.

3 best ASX 200 stocks to buy now

Duxton Water Ltd (ASX: D2O)

Duxton Water is an alternative business, betting on the long-term value of water entitlements in Australia. The company owns a number of entitlements in various regions and leases these out to the agriculture industry. Management has forecast that the dividend can grow every 6 months for the next 2 years. 

Duxton is priced at a large discount to its monthly net tangible assets (NTA). At current prices, the stock should be able to weather more rain in the short term. Over the long term, the scarcity and price of water is expected to rise.

Duxton has a dividend yield of 4% or 5.7% grossed-up.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

This ETF holds a basket of 62 of the ASX’s best dividend-paying stocks. The composition of holdings has changed recently in line with market and economic conditions. The ETF has sold down the banks in order to buy more reliable dividend stocks.

Two of the top holdings now include BHP Group Ltd (ASX: BHP) and Wesfarmers Ltd (ASX: WES). Given the large number of delayed payments and cancelled dividends, a forward dividend estimate is more reliable than a trailing yield. Vanguard estimates a forward yield of 6.2% or 8.48% grossed-up.

Macquarie Group Ltd (ASX: MQG)

Macquarie may perform better than the other big ASX banks given its diversified operations. The group has significant operations in investment banking and asset management. Investment banking is often the most profitable during downturns, where there is a lot of capital raising and takeovers.

For FY21, Macquarie offers investors an estimated 3.91% partially franked dividend yield.

Foolish bottom line

Retirement is an opportunity to benefit from all your hard work and sacrifices. Selling down a portion of your portfolio in high-valued markets, mixed with taking dividends in cash during bear markets is a great way to fund your lifestyle as an investor in retirement.

More reading

• Afterpay share price rockets 50% in May, is it in the buy zone?
• Why these 3 ASX 200 blue chips could be set for growth this week
• Why the price of these ASX travel shares soared over 30% since mid-May
• 3 top ASX dividend shares to buy now
• 3 ASX 200 shares to watch this week

Motley Fool contributor Lloyd Prout has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended DUXTON FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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