PIS fielding acquisition offers from institutions

Barry Lambert

Australia’s largest dealer group, Professional Investment Services, has received two acquisition offers from institutions in the past three weeks, according to chief executive Robbie Bennetts.

Bennetts also acknowledged that PIS, which together with Count is Australia’s fastest growing dealer group, is itself currently in negotiations to acquire other dealer groups.

He said the offers were taking place within the context of a financial services sector that has experienced “exceptionally busy” merger and acquisitions (M & A) activity over the past three weeks.

The merger discussions by Westpac and St George banks represent the “tip of the iceberg in terms of M & A activity the sector can expect to see going forward”, he said.

“What these discussions have flagged is that we’re going to see a lot more consolidation in these types of markets, with lots and lots of acquisitions going on this year in dealer groups and the banks.

“In fact, if I were to be a speculator, I would say that we will see M & A activity not seen since the heyday of perhaps the late 1990s, (as characterised by) St George’s acquisition of Asgard and ING’s acquisitions of various dealer groups.”

However, he said he does not see the merger as being a “major problem to our operations as a group, as PIS does lots of business with both Westpac and St George”.

Expanding on the offers to acquire PIS, which last year reportedly had 1,444 advisers, Bennetts said PIS had received “two telephone calls in the last three weeks asking if we were interested in having further institutional ownership”.

“I suppose being responsible people, we will have to look at these for our shareholders, but at the end of the day, I don’t see us as a target (for acquisition) as such.

“I certainly see us as a company that is in a position to benefit from (acquiring) others as we go forward.”

Count executive chairman Barry Lambert said the Westpac/St George merger, which would create the third largest dealer group behind PIS and AMP, is “symbolic of what’s going to happen in the financial services sector this year”.

“There’s going to be a lot of rationalisation, and not just at the very top end, as represented by a Westpac/St George merger, but perhaps all the way down the chain.

“After all, if the banks are having to rationalise, how are the little guys going?”

At the same time, Lambert emphasised that Count would “never countenance anybody taking us over”.

“You can rest assured that Count is independent and will remain that way, and that’s absolutely a guarantee.

“As for St George and Westpac being combined, they still can’t buy us.”

As with Bennetts, Lambert said the merger would have “no impact on Count’s operations, as both Westpac and St George are already out there now as financial planning groups”.

“It’s just a case of two becoming one, which doesn’t make them any better or stronger in the marketplace,” he said, adding that Count already uses the BT platform and has a mortgage broking relationship with St George.