BOQ to acquire ME Bank for $1.3 billion

BOQ to acquire ME Bank for $1.3 billion

Bank of Queensland (ASX: BOQ) hopes to raise $1.35 billion in order to acquire the entirety of Members Equity Bank (ME Bank) for $1.325 billion, with the merger to create a "compelling alternative to the big banks".

The acquisition is also expected to broadly double BOQ's retail bank offering and provide geographic diversification.

Chairman Patrick Allaway says BOQ's planned acquisition will give the company more ammunition to take on the Big Four banks.

"Today's announcement is another major step in our strategy to be the leading customer-centric alternative to the big banks," says Allaway.

"With the addition of the ME Bank business, BOQ now has material scale and a compelling growth platform to support this ambition."

Once the merger is complete the group will have total assets worth more than $88 billion, with total deposits of more than $56 billion.

Post-acquisition, the ME Bank base in Melbourne will remain and the ME brand will be maintained and grown by BOQ.

In order to acquire ME, BOQ is rattling the tin to raise $1 billion via an entitlement offer, and a further $350 million through an institutional placement.

The offer price for both the offer and the placement will be $7.35 per share, representing a 12.6 per cent discount to BOQ's closing price of $8.41 on 18 February 2021.

Approximately 184 million new shares will be issued, representing 40.4 per cent of BOQ's existing securities on issue. The acquisition itself represents close to a third of BOQ's last market capitalisation before the company entered a trading halt. 

BOQ managing director and CEO George Frazis says the purchase of ME Bank will be "defining" for the company.

"Critically, ME Bank delivers material scale, broadly doubles our Retail bank, and provides geographic diversification," says Frazis.

"The ME Bank brand is also a great fit with the BOQ and Virgin Money brands, creating customer-centric alternatives in Australia.

"It is an exciting day to see two strategically and culturally-aligned businesses come together and we look forward to continuing to build ME Bank's strong brand, accelerate growth and create new opportunities for our people and the group."

Completion of the acquisition is targeted before the end of BOQ's 2021 financial year, subject to regulatory approval.

Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

Blackstone waits on gaming authorities as Crown shareholders approve $8.9b buyout

Blackstone waits on gaming authorities as Crown shareholders approve $8.9b buyout

Shareholders of Crown Resorts (ASX: CWN) have voted in favour of th...

Carsales.com founders sell Melbourne office development for $60.25m

Carsales.com founders sell Melbourne office development for $60.25m

A Singapore-listed property trust managed by Frasers Property (SGX:...

Woolworths adds controlling stake in MyDeal to cart for $218 million

Woolworths adds controlling stake in MyDeal to cart for $218 million

Woolworths (ASX: WOW) is looking to enhance its online marketplace ...

Bendigo-based Apiam Animal Health saddles up with $13.8m acquisitions

Bendigo-based Apiam Animal Health saddles up with $13.8m acquisitions

Vet services business Apiam Animal Health (ASX: AHX) has gone ...