Demands for a higher bid from angry St George shareholders have prompted Westpac Bank and St George Bank to agree to a revised merger proposal.
St George stockholders will now receive a fully franked special dividend of $1.25 per share, up from 97 cents, on top of St George’s final dividend, to be unveiled when it posts its annual results on October 29.
“This will ensure that we realise merger benefits more quickly and work closely together to optimise customer retention,” Westpac chairman Ted Evans said in a statement to the Australian Securities Exchange (ASX).
The merger exchange ratio was kept at 1.31 Westpac shares for each St George share.
Westpac also cited it will integrate the businesses faster, while mantaining the individual brands of both companies.
Westpac’s offer should be sweetened, according to the Australian Shareholders Association (ASA) chief executive Stuart Wilson, however, the independent expert Grant Samuel said the proposal was fair and reasonable, and in the best interest of St George shareholders.
Westpac made the $18.1 billion merger offer in May, which would create Australia’s largest bank and third-biggest dealer group, if St George shareholders agree to the deal in November.
Together they would have 1124 financial planners with 648 practices, according to data from the latest IFA Dealer Group Survey.
Speculation has also arisen that Westpac will combine BT’s platforms with St George-owned Asgard, should the banks merge.
