The directors of Home Building Society Ltd have moved to reassure shareholders that its proposed merger with Bank of Queensland would not be affected by BOQ's failure to complete a separate merger with Mackay Permanent Building Society Ltd.
The directors of Home Building Society Ltd have moved to reassure shareholders that its proposed merger with Bank of Queensland would not be affected by BOQ's failure to complete a separate merger with Mackay Permanent Building Society Ltd.
The proposed merger of BOQ and Mackay will not go ahead after a higher offer for Mackay was made by regional lender Wide Bay Australia Ltd, causing BOQ to terminate its offer.
The higher offer has caused some jitters among Home shareholders, with the news coming ahead of a vote on the planned merger at the company's November 30 scheme meeting.
"The directors of Home have considered the impact of the BOQ-Mackay Permanent merger not proceeding on the Home scheme proposal and do not consider it to be material to the decision of Home shareholders on whether or not to vote in favour of the Home scheme proposal," Home said in a statement.
"The independent expert Lonergan Edwards & Associates Ltd has confirmed that the BOQ - Mackay Permanent merger not proceeding does not alter its conclusions in relation to the Home scheme proposal.
"The independent expert continues to conclude that, in the absence of a superior proposal, the proposed merger between Home and BOQ is fair and reasonable and in the best interests of Home Shareholders."
Shares in Home closed down 1.1 per cent to $17.32.
The full text of a Home announcement is pasted below
The Scheme Booklet issued by Home Building Society Ltd ("Home") to shareholders in relation to the proposed merger ("Home Scheme Proposal") between Home and Bank of Queensland Limited ("BOQ") contains references to a proposed merger between BOQ and Mackay Permanent Building Society Ltd ("Mackay Permanent").
As a result of a competing offer for Mackay Permanent by Wide Bay Australia Limited, the proposed merger between BOQ and Mackay Permanent will not proceed. BOQ announced today that it had terminated the Merger Implementation Deed with Mackay Permanent.
The directors of Home have considered the impact of the BOQ-Mackay Permanent merger not proceeding on the Home Scheme Proposal and do not consider it to be material to the decision of Home shareholders on whether or not to vote in favour of the Home Scheme Proposal.
The Independent Expert, Lonergan Edwards & Associates Limited, has confirmed that the BOQ - Mackay Permanent merger not proceeding does not alter its conclusions in relation to the Home Scheme Proposal. The Independent Expert continues to conclude that, in the absence of a superior proposal, the proposed merger between Home and BOQ is fair and reasonable and in the best interests of Home Shareholders.
The Home Board continues to unanimously recommend that Home shareholders vote in favour of the Home Scheme Proposal, subject to no superior offer being received and there being no change to the opinion of the Independent Expert.
The Home Scheme Proposal is not conditional in any way on the outcome of the BOQ - Mackay Permanent merger. BOQ has stated that it does not consider the outcome of the BOQ - Mackay Permanent merger to be material to its assets and liabilities, financial position and performance, profits and losses or prospects.
Home's Scheme Booklet includes pro forma financial information for the Merged Group (BOQ and Home) and the Enlarged BOQ Group (BOQ, Home and Mackay Permanent), so as to demonstrate the impact that the BOQ - Mackay Permanent merger would have had on the Merged Group. In sections 4.5(c) and 4.5(e) of the Scheme Booklet, the pro forma income statement and balance sheet present pro forma consolidated financial information for BOQ on a stand alone basis, for BOQ combined with historical financial information from Home (the Merged Group) and for the Merged Group combined with historical financial information from Mackay Permanent (the Enlarged BOQ Group). Home shareholders can use this information to see the pro forma position of BOQ and the Merged Group without the BOQ - Mackay Permanent merger and the impact that the BOQ - Mackay Permanent merger would have had on the "Enlarged BOQ Group". Accordingly, Home shareholders should disregard references in the Home Scheme Booklet to "Mackay Permanent" and "Enlarged BOQ Group".
The changes to the pro forma financial information for the merged entity after removing the Mackay Permanent historical financial information are not material. For example, Mackay Permanent's adjusted Net Profit After Tax for FY071 would have comprised less than 1% of the Merged Group's pro forma Net Profit After Tax for FY072 and Mackay Permanent's actual net assets as at the end of FY07 would have comprised less than 2% of the Merged Group's pro forma net assets.
As the BOQ - Mackay Permanent merger will not proceed, BOQ will not enjoy the expected benefits set out at the end of section 3.1 of the Scheme Booklet, nor be subject to the risks associated with the BOQ - Mackay Permanent merger set out in section 6.5.2 of the Scheme Booklet.
The Home Board encourages all Home shareholders to vote on the Scheme Proposal either in person at the Scheme Meeting to be held at Burswood Convention Centre at 10.30am (Perth time) on Friday, 30 November 2007 or by returning the Scheme Proxy Form by 10.30am (Perth time) on Wednesday, 28 November 2007.
