Wealth management and broking company IWL looks set to be absorbed into the Commonwealth Bank of Australia's (CBA) broking division CommSec after the Australian Competition and Consumer Commission (ACCC) stated it would not oppose the merge.
In a letter to both parties, the ACCC said it would not stand in the way of the CBA's proposed buyout of shares in IWL through a scheme of arrangement.
"This is another important step in the scheme process and gives our shareholders further clarity before the scheme meeting, which is to be held on 31 October 2007," IWL chief executive Otto Buttula said.
"The board of IWL remains committed to pursuing the scheme with CBA, believing it to make strong commercial and strategic sense and to be in the best interests of IWL shareholders."
Under the scheme of arrangement, CBA will offer $6.45 in cash for each IWL share.
In addition to this amount, a 12 cent per share final dividend was to be paid to IWL shareholders on 28 September 2007 by IWL for the period ended 30 June 2007.
In order to provide IWL shareholders with maximum flexibility, each IWL shareholder may elect to receive all of their scheme consideration in CBA shares to a value equivalent to $6.45 per IWL Share.
The independent expert report, conducted by Lonergan Edwards & Associates states that if the scheme does not proceed, in the absence of a superior proposal, IWL shares are likely to trade at a significant discount to the independent expert's valuation and the scheme consideration.
The independent expert therefore recommends IWL shareholders vote in favour of the scheme.
The CBA announced in August it intends to acquire the whole of IWL for more than $370 million.
The proposed acquisition by scheme is expected to be finalised on 12 November 2007, subject to court and shareholder approval.
In April, IWL sold its financial advisory software Visiplan to Iress for around $50 million. Iress also owns competitor Xplan.
