Bendigo Bank rejects Bank of Queensland proposal
The Board of Bendigo Bank Limited (“Bendigo Bank”) today announced it had rejected the conditional proposal from Bank of Queensland Limited (“Bank of Queensland”) to acquire Bendigo Bank by way of a scheme of arrangement.
Under the Bank of Queensland proposal, Bendigo Bank shareholders would receive 0.748 Bank of Queensland shares and $5.50 for each Bendigo Bank share. The proposal was subject to a number of conditions, including the unequivocal support of the Bendigo Bank Board, shareholder approval and due diligence.
Bendigo Bank has carefully considered the Bank of Queensland proposal. The Board believes that the proposal does not provide sufficient value and certainty for Bendigo Bank shareholders. The proposal involves significant risks, including integrating organisations with different business models and philosophies. The Bendigo Bank Board has concluded that the Bank of Queensland proposal is not in shareholders’ best interests.
Bendigo Bank chairman Robert Johanson said the Bank was performing strongly and had excellent prospects on a stand-alone basis.
Mr Johanson said Bendigo Bank had for many years delivered attractive returns to its shareholders, with significant growth in earnings and dividends and strong share price performance.
“Bendigo Bank’s total shareholder returns over the past five years have been more than 130 per cent, substantially out-performing the S&P/ASX 200 accumulation index. Over the past 10 years our total shareholder returns have been more than 400 per cent.”
Bendigo Bank has upgraded its 2007 earnings guidance to cash profit after tax of $117 million, amounting to cash EPS growth of 12 per cent, and has a target for the 2008 financial year of cash EPS growth in excess of 12 per cent.
“Bendigo Bank’s strong prospects are based on our close relationships with customers and other stakeholders, a unique business model, the quality of the Bendigo Bank brand, the support and engagement of our staff and an extensive customer base,” Mr Johanson said.
“In recent years, we have made substantial investments in the business infrastructure required to support future growth. Accordingly, the Board believes that Bendigo Bank is well placed to continue its track record of delivering substantial shareholder returns.
“Having regard to the excellent prospects for Bendigo Bank on a stand-alone basis, the Board could only recommend a change-of-control transaction that it was confident would deliver certain and compelling value to Bendigo Bank shareholders. In the Board’s view, the value under the Bank of Queensland proposal is neither certain nor compelling.”
The Board of Bendigo Bank will continue to consider all options available to maximise shareholder value.