St George board declares preference

Amid widespread speculation that offers may emerge from other major banking groups, the St George Bank board has written to shareholders indicating that it remains positive about the Westpac merger proposal.

The letter, dated as being written on Sunday and released to the Australian Securities Exchange today, makes clear that the board remains highly attracted to the Westpac offer, with the only caveat being, “Your board’s recommendation is subject to no superior proposal emerging, as well as an independent expert’s report confirming that the proposal is in the best interests of St George shareholders”.

The letter said, importantly, there was no break fee payable to Westpac in the event that circumstances changed materially and the board determined that it was in the best interests of shareholders to withdraw its recommendation.”

It said there was still a long way to go in the process before the board would be in a position to convene a meeting of shareholders to consider the vote on the proposal.

“If you approve the proposal, St George shareholders will own approximately 28 per cent of Australia’s largest financial institution and the country’s second biggest publicly-listed company,” the letter said. “It is important to note that even if this proposal is not implemented, St George continues to be in a very strong standalone position.”