Bendigo set to make move on IOOF shares
TheBendigo Bankis looking to buy up to 10 per cent of the share inIOOFholdings and will approach shareholders with a cash payment offer of $2.70 per share.
The shares have yet to list with IOOF saying the timetable for the full demutualisation of the group and the issuing of shares to happen possibly as late as next year. In the demutualisation documents IOOF says the shares have been valued at between $2.70 and $3.15.
The announcement to buy the shares was made by Bendigo Bank managing director Rob Hunt who says the bank viewed the proposal as a way to support its alliance partner and to provide certainty of value to IOOF's new shareholders.
The two groups have a close and well-established relationship with Bendigo Bank purchasing IOOF building society arm in 1998 for scrip which resulted in IOOF holding an interest in the bank of about three per cent.
The relationship was also enhanced earlier this year when IOOF said it would provide funds management and product development operations to the bank.
That deal was made public within the pages of the IOOF demutualisation proposal document which says it will be providing funds management expertise, products, administration and asset management services to the Victorian based banking group.
"Both organisations originated from similar backgrounds and we share a community focus as a core element of our business strategies. We therefore believe it is in the interest of both companies for IOOF shareholders to be able to realise the value of their holdings with certainty while giving IOOF comfort that its stock is held by a partner who shares its aims for the business,” Hunt said in a statement released to theAustralian Stock Exchange(ASX) this morning.
Hunt also says the reason for the offer was to ensure that IOOF shareholders got reasonable value for their stocks in the event they had to sell. He says offer letters would start to be posted from today with a closing date of August 23 this year for shareholders to act.
The offer would be for a maximum of 10 per cent of issued shares and once that limit was reached the offer will terminate and applications will be returned.
AUTHOR
Jason Spits
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