BankWest battles towards float
BankWest and its ownership was one of the key talking points in the halls of Western Australian finance this week 10 years ago.
Challenge Bank, long touted as a takeover suitor for the State-owned bank formerly known as the Rural & Industries Bank, made its acquisition intentions clear.
Then Challenge chairman Neil Hamilton – now chairing companies such as LandCorp, Western Power and the failed miner Sons of Gwalia – released a statement saying that its proposal to acquire BankWest would be worth an extra $100 million over what the WA Government would gain through a float.
If the merger had gone ahead it would have created an entity estimated to be worth $14.3 billion.
However, BankWest managing director Warwick Kent – these days on the board of listed companies such as Commonwealth Bank and Perpetual and chairing Coventry and WA Newspapers – hit back saying that it preferred to pursue the float option.
While the banks exchanged takeover options, AMP Society swooped to buy the State-owned bank’s headquarters the BankWest Tower.
AMP paid $146 million for the prime St Georges Terrace property beating off Brentwood Property Trust, Lend Lease and Ralph Sarich’s Cape Bouvard Investments.
The BankWest Tower was developed in 1988 by Alan Bond and once proudly bore the Bond Corp logo.
As bankers pondered what would happen to WA’s Government-owned funds depository, Gold Mines of Australia was taking possession of its Mt Lyell copper and gold mine in Tasmania.
It also released a $43 million rights issue to fund the project that would bring the mine back to a production rate of about 40,000 ounces of gold a year.
Also on the mining beat, the Australian Securities Commission was looking into a group of Melbourne investors who withdrew their one-day-old 40 cent a share takeover offer for troubled Perth gold miner Mt Burgess.
At issue was a letter the Melbourne-based Cherry Lane Group had sent to the Australian Stock Exchange.
Cherry Lane said it was not a takeover offer, the ASX in Perth said it was and the ASC decided to take a closer look.
Mt Burgess’ share price had plunged from $1.76 to 12 cents before stabilising at 42 cents after the company revealed economic ore at its Butcher Well prospect had been exhausted.
In the Government sphere the Department of Agriculture, which looks after the State’s second major stream of economic activity, was facing a restructure.
Then Agriculture Minister Monty House announced the Government had accepted a report by businessman Roger Hussey that recommended improved leadership for the department, a partnership with industry, the application of the "business unit" model of management and increasing opportunities for private providers and industry.
Agriculture was not the only Government department in line for a shake up with Auditor General Des Pearson announcing that industry assistance of more than $105 million in the decade to 1993 had not been properly administered.
In one case a Government investment of $100,000 in a company resulted in a return of $106 on the original investment when that company became insolvent.
Mr Pearson recommended wide-ranging changes to overcome weaknesses in administration of assistance programs.
Meanwhile, the Government was trying to entice the Singaporean Government to invest in the State by offering a 200-hectare site near Perth for the development of a mini-township.
Bunbury was being considered as one of the sites for the township.
On the sporting front, WA retained the Lexcen Cup for the fourth straight year in the annual State and Territory yachting regatta held on the Swan River.