Bendigo Bank rejects takeover bid
Bendigo Bank has rejected a $2.5 billion bid for the regional communities based group from Bank of Queensland Ltd (BoQ).
The bank also upgraded its earnings guidance for fiscal 2007.
BoQ had offered Bendigo shareholders 0.748 of its share andd $5.50 cash for each Bendigo Bank share, subject to a number of conditions.
“Bendigo Bank has carefully considered the Bank of Queensland proposal,” it said.
“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.”
Chairman Robert Johanson said the regional communities based bank was performing strongly and had excellent prospects on a stand-alone basis.
‘’Bendigo Banks 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,'’ he said.
‘’Over the past 10 years our total shareholder returns have been more than 400 per cent.'’
Bendigo upgrades its fiscal 2007 earnings guidance to a cash net profit of $117 million, amounting to cash earnings per share (EPS) growth of 12 per cent.
The bank had previously forecast cash EPS growth of 10 per cent for the year.
It is also targeting cash EPS growth in excess of 12 per cent for the 2008 financial year.
‘’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.
He said the board could only recommend a takeover if it was confident it would deliver “certain and compelling value'’ to shareholders.
‘’In the board’s view, the value under the Bank of Queensland proposal is neither certain nor compelling,'’ he said.
AAP
