ID :
18481
Mon, 09/08/2008 - 19:06
Auther :
Shortlink :
https://oananews.org//node/18481
The shortlink copeid
St George recommends $17b Westpac bid
(AAP) St George Bank has recommended an improved $17 billion bid from Westpac Banking Corp that will give the happy dragon's shareholders a higher dividend payout.
If successful the revised proposal will lead to the biggest takeover in the banking
sector in Australia.
St George said that under the deal its shareholders will get a 28 cents increase to
a combined final a special dividend to be announced at its annual results on October
29.
St George shareholders now stand to receive a fiscal 2008 final dividend and a
special dividend of up to $1.25 per share if they give the green light to the
takeover at a scheme meeting to be held on November 13.
Westpac agreed to the payment of the special and final dividend by St George as long
as the aggregate amount did not exceed $1.25 per St George share, the two banks
said in a joint statement.
The 28 cents per share hike will cost an extra $160 million.
Westpac's base offer of 1.31 of its shares for each St George share is unchanged.
St George's board confirmed its unanimous recommendation of the Westpac offer, in
the absence of a superior proposal.
"The St George board believes that the merger of St George and Westpac, on the terms
proposed, is a very positive outcome for St George shareholders," St George chairman
John Curtis said.
"The revised merger terms recognise the contribution of St George to the strength of
the combined organisation."
Meanwhile, St George's independent expert, Grant Samuel, said Westpac's bid was fair
and reasonable and in the best interests of St George shareholders.
The takeover will be earnings per share accretive within three years of the merger,
Westpac said.
The revised offer includes a break fee of $100 million payable by St George to
Westpac in certain circumstances.
Both the scheme book and Grant Samuel's report will be lodged with the Australian
Securities and Investments Commission shortly and to the market on September 30.
Shares in the two banks made strong gains amid a buoyant wider market. St George
finished 4.73 per cent, or $1.44 higher at $31.89 and Westpac closed 5.27 per cent,
or $1.23 ahead, at $24.58.
Global ratings agency Standard & Poor's said it will keep St George, and its
wholly-owned lenders' mortgage insurer, St George Insurance Australia Pty Ltd, on
credit watch positive, after reviewing the revised proposal.
"The proposed merger revisions do not affect our previous expectation that the
ratings on St George are likely to be equalised with the ratings on Westpac if the
merger succeeds, as we expect St George to become a core subsidiary of the Westpac
group," Standard & Poor's credit analyst Maryanne Galea said.
If successful the revised proposal will lead to the biggest takeover in the banking
sector in Australia.
St George said that under the deal its shareholders will get a 28 cents increase to
a combined final a special dividend to be announced at its annual results on October
29.
St George shareholders now stand to receive a fiscal 2008 final dividend and a
special dividend of up to $1.25 per share if they give the green light to the
takeover at a scheme meeting to be held on November 13.
Westpac agreed to the payment of the special and final dividend by St George as long
as the aggregate amount did not exceed $1.25 per St George share, the two banks
said in a joint statement.
The 28 cents per share hike will cost an extra $160 million.
Westpac's base offer of 1.31 of its shares for each St George share is unchanged.
St George's board confirmed its unanimous recommendation of the Westpac offer, in
the absence of a superior proposal.
"The St George board believes that the merger of St George and Westpac, on the terms
proposed, is a very positive outcome for St George shareholders," St George chairman
John Curtis said.
"The revised merger terms recognise the contribution of St George to the strength of
the combined organisation."
Meanwhile, St George's independent expert, Grant Samuel, said Westpac's bid was fair
and reasonable and in the best interests of St George shareholders.
The takeover will be earnings per share accretive within three years of the merger,
Westpac said.
The revised offer includes a break fee of $100 million payable by St George to
Westpac in certain circumstances.
Both the scheme book and Grant Samuel's report will be lodged with the Australian
Securities and Investments Commission shortly and to the market on September 30.
Shares in the two banks made strong gains amid a buoyant wider market. St George
finished 4.73 per cent, or $1.44 higher at $31.89 and Westpac closed 5.27 per cent,
or $1.23 ahead, at $24.58.
Global ratings agency Standard & Poor's said it will keep St George, and its
wholly-owned lenders' mortgage insurer, St George Insurance Australia Pty Ltd, on
credit watch positive, after reviewing the revised proposal.
"The proposed merger revisions do not affect our previous expectation that the
ratings on St George are likely to be equalised with the ratings on Westpac if the
merger succeeds, as we expect St George to become a core subsidiary of the Westpac
group," Standard & Poor's credit analyst Maryanne Galea said.
