With the StateWest Credit Society Ltd and Home Building Society Ltd merger finally taking place after several setbacks, stockbroker Euroz Securities will have around $45 million worth of Home shares to sell.
With the StateWest Credit Society Ltd and Home Building Society Ltd merger finally taking place after several setbacks, stockbroker Euroz Securities will have around $45 million worth of Home shares to sell.
The block is the result of a deal allowing more than 20 per cent of StateWest members to cash in their interests following a majority vote to approve the merger.
StateWest chief executive and future company managing director Greg Wall said the share sale was a positive result for the yet-to-be-merged entity, suggesting there was keen interest in the market from institutions who believed the merger would provide scale and liquidity that Home could not offer on its own.
Mr Wall said the decision by 13,500 StateWest members not to take up shares was expected and that the merged financial services group would gain more than 45,000 shareholders through the amalgamation, putting it in the big league as far as numbers on the register went.
“Institutions have long wanted to get involved but found it difficult due to Home’s stock history of small trade and low liquidity,” he said.
“You can now draw comparisions between our 60,000 and the number of shareholders in larger industrial companies. Investors are very keen to get onboard and there are very strong indications the (remaining) shares will go very quickly.
“Twenty per cent of members have selected to take cash because it is an attractive gain for them. They are mainly mums and dads who have three to four members per family and stand to collect a big windfall.”
Members were offered in exchange for each StateWest share, approximately 237 Home shares worth about $3,031, based on the 45-day volume-weighted average price of Home’s shares as at May 1. Shareholders will also receive a special dividend of approximately $215.
Mr Wall said the company had 60,000 registered shareholders, including 7,000 Home shareholders, with a broad spread of family and institutional investors.
Under the merger proposal, Home will acquire the shares in StateWest through the issue of approximately 15.17 million shares to StateWest members.
The company will have a market capitalisation of $430 million, with $3.5 billion worth of funds under management.
Mr Wall explained that, with the combined financial and customer service strength of the companies and the advantage of a bigger branch network and great value products, it would be a major rival to the big banks.
StateWest is currently conducting market research to create a new corporate brand and the two companies will run parallel until a systems conversion, planned for September.
At the time of WA Business News going to press, Home and StateWest were set to seek final court approval for the merger in the Federal Court in Perth on June 28.
