Pyne Gould to consider own future once merger complete

Tuesday 5th October 2010

Pyne Gould, the major partner in the proposed South Island bank merger, will mull its own future once the deal is completed by the end of the year.

Marac, PGC's finance unit, has the lead role in a proposed merger with Canterbury and Southern Cross Building Societies to create a locally owned and publicly listed bank, after the new holding company's board and executive were named on the presumption the merger gets regulatory and investor approvals.

PGC will undertake a strategic review to determine how to carve out its Torchlight Fund assets, which are an investment vehicle of major shareholder George Kerr, and how to unlock shareholder value once the merger's complete. The review will be led by managing director Jeff Greenslade, who's slated to lead the new entity, and First NZ Capital will act as an adviser.

The merger is tipped to be completed by the end of the year, with a listing aimed for early February. From there, the merged unit will apply for a banking licence, provided its gets an investment grade credit rating, something already flagged as a possibility by Standard & Poor's.

Leading the merged company's board will be PGC chairman Bruce Irvine, who will be joined by George Gould, Bryan Mogridge, Michelle Smith and Greenslade. CBS will be represented by chairman Gary Leech and Graham Kennedy, while SCBS will have chairman Geoffrey Ricketts and Christopher Mace.

Greenslade will lead the executive team, and will be joined by PGC's Sean Kam, Mark Mountcastle, Chris Flood, Will Purvis, Michael Jonas and Craig Steven. SCBS's Mark Bellas will take on chief operating officer, while CBS's CEO Bryan Inch will be head of retail. The merged entity won't have a place for SCBS's CEO Bob Smith.

Last month the boards of the three financiers signed an implementation agreement that would see the merged entity list on the NZX, with PGC holding 71% of the firm, and the building societies each controlling 14.5%.

The merger would create a lender with $2.2 billion of assets and accomplish Marac's goal of becoming a registered bank. Marac's aspiration was dented last year when its credit rating was downgraded to a speculative BB+.

PGC's shares gained 2.4% to 43 cents in trading today, and have dropped 13% this year, while CBS shares were unchanged at $2.85 and have fallen 6.6% since the start of the year.

Businesswire.co.nz

Comments from our readers

No comments yet