Online broker Etrade Australia's (Etrade) shares soared yesterday as Australia New Zealand Bank (ANZ) increased its takeover bid for the firm and dropped the 90 per cent minimum acceptance condition.
ANZ confirmed late yesterday evening it had increased its stake in Etrade Australia from 34.2 per cent to 42.6 per cent following the revised offer.
Australia's third largest bank hiked its bid for Etrade by 6.2 per cent from $4.05 to $4.30, sparking a flurry of trading in Etrade that drove its shares up by almost 3 per cent to $4.30.
The offer can be accepted in cash or ANZ scrip to an equivalent value.
The much anticipated move by ANZ was welcomed by Etrade's independent directors, who recommended the bid to shareholders.
Etrade chairman Kerry Roxburgh said in a statement to the Australian Securities Exchange that the integration of Etrade and ANZ was the logical next step.
"The increased offer price represents a significant premium to the price at which Etrade Australia shares were trading prior to the announcement of the initial ANZ offer on 19 February 2007 and is within the valuation range provided by Grant Samuel," he said.
The revised offer has increased speculation that technology firm IWL will come in with a rival bid.
"ANZ have obviously been spooked," said one source close to the deal. "IWL has been going round the market like crazy to raise a syndicate."
He added, however, that it looked likely that ANZ would achieve the 51 per cent needed to gain control of Etrade.
"All eyes are now on IWL and Caledonia Investments after this latest offer by ANZ. I think shareholders are likely to wait to see what IWL do. It would be stupid to accept ANZ's offer if IWL then come out and offer $4.40," he said.
ANZ's revised offer is pitched at the bottom of the price range suggested by investment firm Grant Samuel's independent valuation earlier this month. Grant Samuel said Etrade shares were worth between $4.22 and $4.74.
IWL announced in March it did not intend to accept ANZ's original offer and increased its stake in the company with a view to a potential bid of its own.
At the last count IWL had 3.2 million shares in the online broker, or about 3.2 per cent of the company.
ANZ's original Etrade bid was also met with resistance by Caledonia Investments - its second biggest shareholder - which instead decided to increase its holding from 9 per cent to 12 per cent.
Share research and advisory group Invest4Profit also poo pooed the original bid. It called the $4.05 offer highway robbery and urged its clients, which it claimed own up to 10 per cent of Etrade, to reject the offer.
