Bank of Queensland steps up hunt for bolt-on opportunities
Bank of Queensland has topped up its war chest with an $18.6 million placement as it scours the financial landscape for bolt-on acquisitions to accelerate growth.
The placement, through Macquarie Equity Capital Markets, follows BoQ's $3.5 million legal settlement with former joint venture partner Metyor Inc and suggests a deal may be imminent.
A range of institutions snapped up the 2.7 million new shares on offer at $6.90 each - a 6.1 percent discount to the weighted 10 day trading average - prompting the stock to close 14 lower at $7.30.
Managing director David Liddy, who has been itching to get an acquisition under way, was "delighted" with the Tier 1 capital injection. "Support from existing institutional investors was strong and we were also able to welcome new investors to BoQ's share register," he said.
Earlier this year Mr Liddy warned that the bank faced a $7.5 billion revenue hole which it needed to plug in order to achieve double-digit market share within five years.
Consequently Macquarie Corporate was engaged to identify potential acquisitions to help accelerate growth towards targeted assets under management of $21.1 billion by 2007.
"We can't achieve our goal by organic growth alone and part of that non-organic growth will be purely expansion outside of Queensland, plus other opportunities to acquire customers, which is obviously through selective acquisition," Mr Liddy said.
"We don't believe we've got an issue raising capital or debt and we've got a share price from a currency point of view which is pretty strong."
Mr Liddy said small to medium business enterprise was of primary interest, particularly in leasing and factoring as well as broader consumer banking opportunities. BoQ has one litigation hurdle to clear with listed software company Global Technology Australasia, which last year sued the bank for $7.5 million and faces a $9.1 million damages counterclaim for breach of contract.
The placement's success indicates that institutions are much more comfortable with the litigation risk now that the Metyor dispute, which involved a damages claim of up to $500 million, has been dispensed with.
A range of institutions snapped up the 2.7 million new shares on offer at $6.90 each - a 6.1 percent discount to the weighted 10 day trading average - prompting the stock to close 14 lower at $7.30.
Managing director David Liddy, who has been itching to get an acquisition under way, was "delighted" with the Tier 1 capital injection. "Support from existing institutional investors was strong and we were also able to welcome new investors to BoQ's share register," he said.
Earlier this year Mr Liddy warned that the bank faced a $7.5 billion revenue hole which it needed to plug in order to achieve double-digit market share within five years.
Consequently Macquarie Corporate was engaged to identify potential acquisitions to help accelerate growth towards targeted assets under management of $21.1 billion by 2007.
"We can't achieve our goal by organic growth alone and part of that non-organic growth will be purely expansion outside of Queensland, plus other opportunities to acquire customers, which is obviously through selective acquisition," Mr Liddy said.
"We don't believe we've got an issue raising capital or debt and we've got a share price from a currency point of view which is pretty strong."
Mr Liddy said small to medium business enterprise was of primary interest, particularly in leasing and factoring as well as broader consumer banking opportunities. BoQ has one litigation hurdle to clear with listed software company Global Technology Australasia, which last year sued the bank for $7.5 million and faces a $9.1 million damages counterclaim for breach of contract.
The placement's success indicates that institutions are much more comfortable with the litigation risk now that the Metyor dispute, which involved a damages claim of up to $500 million, has been dispensed with.
Subscribe