(26 March 2007 – Australia) Bank of Queensland has confirmed arrangements for equity financing for the merger proposal announced for Bendigo Bank last week.Part of the cash consideration to Bendigo Bank shareholders under the merger proposal will be funded through an entitlements issue to all BOQ shareholders.
Under the merger proposal BOQ is offering a combination of cash and shares, which includes 0.748 Bank of Queensland shares and A$5.50 cash for each Bendigo Bank share.
BOQ managing director David Liddy said resolution of the merger funding paved the way for the bank to progress discussions with Bendigo.
‘ABN AMRO Rothschild (AAR) has provided an offer of underwriting on acceptable terms to BOQ, and senior debt needed to fund the remaining purchase consideration will come from our existing funding sources,’ he said.
BOQ said it proposed that subsequent entitlements issue will be lead managed by AAR and Macquarie Equity Capital Markets Limited with the size of the entitlements issue expected to be between A$500 and 600 million subject to assessment of the final capital position of the merged group.
The bank said the terms of the entitlements issue would be confirmed at a later date with timing subject to the finalisation of the merger proposal and scheme of arrangement which will be considered by Bendigo shareholders.