StateWest vote puts Home merger back on track

StateWest Credit Society members have voted for demutualisation for the second time as part of a rerun of its proposed merger with Home Building Society Ltd.

Around 50 per cent of StateWest's total membership cast votes, and of the 29,426 votes, nearly 90 per cent were cast in favour of the demutualisation proposal.

The vote is the first of two stages in StateWest's proposed Home merger, a process which is being repeated after dissident members had the first vote scrapped by the courts due to insufficient information provided to members.

The members, led by former executives of StateWest, had objcted to the lack of detail provided on management remuneration, namely the salary and benefits package proposed for the society's CEO Greg Wall who is to run the merged entity.

For demutualisation to be effected, 25 per cent of StateWest members were required to cast votes on the demutualisation resolution and of these 75 per cent needed to vote in favour of demutualisation.

Home shareholders have already approved the merger.

Below is the full announcement:

StateWest Credit Society members have again voted strongly in favour of demutualisation as part of its proposed merger with Home Building Socierty Ltd.

Around 50 per cent of StateWest's total membership cast votes, and of the 29,426 votes, nearly 90 per cent were cast in favour of the demutualisation proposal.

The vote is the first of a two step process for StateWest's proposed Home merger.

For demutualisation to be effected, 25 per cent of StateWest members are required to cast votes on the demutualisation resolution and of these 75 per cent needed to vote in favour of demutualisation.

StateWest will now seek Federal Court approval to convene a meeting of members to consider the formal merger proposal.

Home shareholders have already approved the merger.

StateWest chairman Trevor Halliday said the voter turnout was exceptional, especially given the fact it was the second time members had been asked to make a decision on demutualisation.

"Our Members have sent a very clear message that they support the demutualisation process. Again, voter turnout at over 50 per cent was very strong compared to votes held by other mutual organisations and the YES vote was emphatic," said Mr Halliday.

In August 2005, Home and StateWest announced an in-principle agreement to merge the two organisations to create a strong new Western Australian-based financial institution.

The indicative timetable for completion of the transaction is as follows:

4 May*
Court hearing

24 May*
Posting of merger documentation and EGM notice to StateWest Members

21 June*
Meeting of StateWest Members (and EGM) to approve merger

28 June*
Second Court Hearing to approve Scheme

10 July*
Implementation of the Scheme

*dates subject to change

THE FULL MEDIA RELEASE APPEARS BELOW.

21 April 2006

STATEWEST MEMBERS VOTE OVERWHELMINGLY
IN FAVOUR OF DEMUTUALISATION

StateWest Credit Society today announced that its Members have again voted strongly in favour of demutualisation, with an 89.71% YES vote in favour of the proposal.

29,426 votes were counted (50.45% of StateWest's total membership), with 26,398 cast in favour of the demutualisation proposal.

The demutualisation vote is the first of a 2 step process through which StateWest Members will consider a proposal to merge with Home Building Society Ltd.

StateWest will now seek Federal Court approval to convene a meeting of its Members to consider the formal merger proposal. Home shareholders have already approved the merger.

StateWest Chairman Trevor Halliday said the voter turnout was exceptional, especially given the fact it was the second time Members had been asked to make a decision on demutualisation.

"Our Members have sent a very clear message that they support the demutualisation process. Again, voter turnout at over 50% was very strong compared to votes held by other mutual organisations and the YES vote was emphatic," said Mr Halliday.

"The Members have given StateWest a clear mandate to proceed to the vote on the merger proposal.

"This sort of response makes it very clear to us that the objections we have received on this process are a small minority view and that the vast majority of our Members are supportive of the merger proposal being placed before the Members for their approval."

In August 2005, Home and StateWest announced an in-principle agreement to merge the two organisations to create a strong new Western Australian-based financial institution.

The StateWest demutualisation was the first step in the merger process whereby StateWest Members were asked to approve a change of status of their organisation ahead of a later vote on the merger itself.

For demutualisation to be effected, 25% of StateWest Members were required to cast votes on the demutualisation resolution and of these 75% needed to vote in favour of demutualisation.

Demutualisation was initially approved by StateWest Members in November 2005 but a second vote was required when objections were raised in relation to the disclosure of certain information in the original disclosure statement.

StateWest and Home chose to re-run the demutualisation vote in the interests of time and in keeping with the wishes of the majority of StateWest Members.

StateWest Chief Executive Officer Greg Wall said he was confident that all legal issues had been covered ahead of next month's Court application to convene the meeting for the vote on the merger proposal.

"We have worked assiduously to ensure there has been proper legal preparation of the documents for the demutualisation vote and for the vote on the merger proposal," said Mr Wall.

"We now look forward to moving onto the next stage of the process."

Following Court approval to hold the Scheme Meeting, StateWest will despatch formal merger documentation to its Members and ask them to vote on the merger proposal.

StateWest Members can vote either by proxy form or in person at the Scheme Meeting which subject to Court approval is tentatively scheduled for 21 June 2006.

Under the proposal, Home will acquire the shares in StateWest by way of Scheme of Arrangement through the issue of 15.17m shares. The shares will be distributed equally to StateWest Members once all approvals and merger conditions have been met. In addition StateWest Members will also receive a special dividend from StateWest.

At the current market levels the amount each StateWest Member would receive in shares and dividend is worth approximately $3,146 (based on a 45 day volume weighted average price for Home shares of $12.77 at the close of trade on 18 April 2006).

The indicative timetable for completion of the transaction is as follows:

4 May*
Court hearing

24 May*
Posting of merger documentation and EGM notice to StateWest Members

21 June*
Meeting of StateWest Members (and EGM) to approve merger

28 June*
Second Court Hearing to approve Scheme

10 July*
Implementation of the Scheme

*dates subject to change

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